On-trade

UK pubs “will fail within months” without government support

UK pubs will fail within months without urgent Government support for crushing energy costs according to the British Institute of Innkeeping which has revealed the results of a flash survey of members on the devastating impact of the rise in energy bills.

 

 

“If Government does not act rapidly to support these small businesses that not only do so much for their communities, but also provide vital business to local suppliers and brewers as well as significant tax revenues into the Treasury, they will be lost, in some cases forever.” – BII Chief Executive Steve Alton.

“If Government does not act rapidly to support these small businesses that not only do so much for their communities, but also provide vital business to local suppliers and brewers as well as significant tax revenues into the Treasury, they will be lost, in some cases forever.” – BII Chief Executive Steve Alton.

With only one in four members currently in a fixed price contract secured before the recent price rises, the majority are facing huge uncertainty as they try to secure long-term contracts for their energy needs.

90% of respondents who’ve been quoted for new contracts are seeing their prices at least double from the price they’re paying now and nearly two in three of those are seeing price rises of over 300%, with one in two of those being quoted at 400% or more.

In addition to these unsustainable rises, one in three of those trying to secure a contract have not been able to do so, leaving them having to pay even higher variable rates with no certainty for their futures.

The impact of these price rises means that one in two businesses will now be loss-making and a massive one in three of those businesses will fail in the next three months, predicts the BII.

“We’ve been sharing the data from our members with officials and Ministers in Government for many months now” said BII Chief Executive Steve Alton, “leaving them in no doubt of the impact of increasing pressures of cost of business inflation and specifically the escalating energy crisis.

“The effect of these unprecedented energy price rises on our nations’ pubs has now reached a critical level. Behind these stark headlines, the reality for individual operators running essential businesses connecting people at the heart of their communities is simply devastating.

“This is not just about business failure and the loss of livelihoods for our members, it’s the loss of jobs in local communities, homes for families and the vital lifeline that pubs provide for those facing isolation and loneliness in villages, towns and cities across the UK.

“The demand from consumers to return to our pubs after the central role they played in supporting their communities in the pandemic has proven how vital it is for us all to reconnect with friends and family.

“If Government does not act rapidly to support these small businesses that not only do so much for their communities but also provide vital business to local suppliers and brewers as well as significant tax revenues into the Treasury, they will be lost, in some cases forever.

“We’re calling on Government to provide a meaningful cap for business energy as well as grant support for our essential, safe spaces for all across the UK. We’re also calling for at least a 50% reduction in business rates for 23/24 as well as a significant cut in duty for draught beer and cider of at least 20% on containers of 20 litres or more to allow them to begin to recover their businesses.

“These measures alongside a reduced rate of VAT, encouraging consumers to continue to visit pubs during this cost-of-living crisis, will be essential to ensure their survival.

“Without support, the alternative is simply unthinkable. The impact on the economy will be enormous, but the long-term damage to our unique heritage and the social fabric of our nation will be devastating.”

The recent announcement by the UK’s new Prime Minister Liz Truss on the six-month equivalent match to the domestic energy price guarantee and the capping of energy costs for small businesses is welcome but is only one element of an overall package of support that will be needed to safeguard these essential local businesses and the BII remains gravely concerned for the future survival of its members’ pub businesses.

 

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