Total beer sales have dropped by 4.5 percent compared with the same quarter last year, while beer sales in pubs have plunged 10.6 percent, the British Beer and Pub Association said in its UK Quarterly Beer Barometer.
Some 107 million fewer pints were sold between April and June this year compared with the same three months in 2007 -- a drop of 1.2 million pints per day, said the BBPA, which represents the brewing and pub sector.
And in pubs, bars and restaurants, the fall was 144 million pints, down 1.6 million pints per day.
The BBPA blamed the drop on tax increases. The average price of a pint of lager this year is 2.65 pounds, according to the Campaign for Real Ale group.
Sales from supermarkets and shops continued to increase, up 3.8 percent on the same quarter this year, which the BBPA said confirmed a long-term trend towards drinking at home.
The British pub scene has undergone radical changes in recent years. Regular pubs could serve after 11:00 pm from November 2005 in England and Wales and smoking in indoor public places in England was banned by July 2007.
The move followed similar bans in Scotland, Wales and Northern Ireland.
Finance minister Alistair Darling raise duty by four pence per pint in his March annual budget and said alcohol duties would rise by two percent above the rate of inflation over the next four years.
The BBPA estimated that the overall drop in sales cost the Treasury 88 million pounds in lost beer duty and value added tax compared to the same period last year.
"Beer sales are on the slide and the tax increase in the budget has made it worse," said BBPA chief executive Rob Hayward.
"This is hitting Britain's brewers and pubs hard. It's also creating a large hole in the Chancellor's pocket with the Treasury's tax take also down.
"This must call into question the government's planned beer tax escalator. Where's the logic in taxing more when you're taking less?
"With around one million jobs reliant on the trade, the loss of 1.6 million pints a day is having a serious impact, not just on the sector itself, but on the UK economy as a whole.
"Beer sales in pubs are now at their lowest level since the Great Depression of the 1930s -- down seven million pints a day from the height of the market in 1979.
"We need a change of approach from the government. Brewing is a major industry, beer our national drink and pubs a treasured part of our national culture."