No more opening times
The deepening energy crisis has left Britain’s pubs in a critical situation and, without “immediate government intervention”, many will be forced to close their doors.
This stark message came today from six of the country’s largest brewery bosses, who sit on the board of the British Beer and Pub Association.
In an open letter to the government, they warned that soaring energy bills would cause “irreversible” damage to the industry unless ministers step up support.
Chris Jowsey, boss of Admiral Taverns, which has 1,600 pubs across the country, said many of his tenanted pubs now pay more in energy bills than they do in rent. Some pub owners have complained to him about electricity bills going up by as much as 450%.
“I find it incredible that we have to wait for one person to get elected before we actually get some decisions” on how to tackle the crisis, Jowsey said, adding that he had personally raised the issue of energy prices with ministers over six months ago.
While today’s warning came from pub bosses, the conundrum is impacting those across the hospitality sector.
To date, conversations on soaring energy bills have focussed heavily on households – and the astronomical rise of the household price cap. This is indeed critical – by October, the average household’s energy bill will be over £2,000 higher than the same time last year. But we must not overlook the pressure facing businesses.
When it comes to cost of energy, business are not even protected by a cap at all, meaning they have no buffer whatsoever from soaring wholesale gas prices. Even since the start of July, wholesale gas prices in the UK have surged by 145 per cent, and energy providers can pass on these costs in full to cafe and pub owners.
Martin McTague, chair of the Federation of Small Businesses, says that reports from small firms of four- or five-fold increases in their energy bills are coming in thick and fast. The figures being quoted for energy costs “would be laughable”, he added, if their potential effect on business were not so serious.
The hospitality sector has already taken a battering over the past two years thanks to on-off lockdowns. But Emma McClarkin, chief executive of the BBPA, warns that energy bills could cause even more damage to the industry than the pandemic did.
According to research from the BBPA, only 37% of hospitality businesses are currently turning a profit, and the number of pubs in England and Wales has fallen to its lowest since records began in 2005: 400 pubs closed last year and some 200 folded in the first half of 2022.
Some pub owners are calling on ministers to extend the energy cap to businesses as well as households. Others insist the government must go further – and offer pandemic-style levels of support.
Many will wonder if our government can really afford to channel such unprecedented levels of funding into the hospitality sector once again.
But as Nick Mackenzie, boss of Greene King – one of the UK’s biggest pub groups – argues in today’s letter: lack of support now, and subsequent closures, will mean these huge sums of pandemic money spent ensuring pubs could stay in business will effectively be wasted.