- Beth Timmins and Michael Race
- From BBC News
August 30, 2022
Credit, Getty Images
Many of the UK’s traditional pubs will be forced to close due to the current wave of inflation in the country, with energy costs rising by up to 300%.
The warning was issued by directors of the country’s six largest breweries, who called for “immediate government intervention” on the hefty energy bills.
Pub and brewery owners from six companies JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan, Greene King and St Austell Brewery sit on the board of the British Beer and Pub Association (BBPA).
In an open letter to the government, they called for urgent action, including an aid package and a cap on energy prices for businesses. They say that without government support, the energy crisis will do “real and irreversible” damage to the sector.
The price crisis comes at a time when the number of pubs in England and Wales is falling after hitting 39,970 in June, the lowest level on record.
Simon Cleary, who runs The Plow Pub in Great Chesterford, Essex, said his gas and electricity bills had nearly tripled to £35,000 a year.
This means that the pub now has to generate more than R$10,000 in revenue per week to cover costs.
“I think it will be very difficult if the government doesn’t intervene,” he told the BBC.
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Simon Cleary said his pub needs to generate an additional R$10,000 a week to pay the energy bill
Chris Jowsey, chief executive of Admiral Taverns, a business with 1,600 pubs, said its pubs are now paying more on energy bills than rents.
He told the BBC that one of his franchisees decided to leave the pub after 20 years because his electricity bill had risen by 450% a cost he couldn’t pass on to customers.
Jowsey said Admiral is investing in energysaving equipment for basements and is trying to control refrigerator energy use. He also said the company was “looking in great detail at a plan to try to buy energy directly from the market,” but adds, “Even when we went into the energy market in the past few months, at first no one was willing to buy us.” supply. “
“We urgently need government intervention to help because the market is actually broken.”
The Department for Business, Energy and Industry said “no government” is able to control the “global factors putting pressure on energy prices and other business costs”.
“But we will continue to support the entertainment industry in the coming months,” added a spokesman. The government said it was “offering 50% business tax relief to businesses across the UK, freezing taxes on beer, cider, wine and spirits and reducing employers’ social security contributions”.
The government said no policy would be announced until the new prime minister was confirmed on September 5. Conservative politicians Rishi Sunak and Liz Truss are fighting for an election within the Conservative Party to succeed Boris Johnson, who resigned as Prime Minister last month.
“I find it amazing that we have to wait for a person to be elected before making some decisions and policies that protect not just jobs, not just people’s livelihoods, but their homes because most people, the bars operate in this country live on the mezzanine floor of their own pub,” Jowsey said.
Nick Mackenzie, director of Greene King one of the UK’s largest pub groups with more than 3,100 operations said his company faces “the prospect of pubs not being able to pay their bills, jobs being lost and pubs across the country being loved theirs.” Close the door”.
He added that it would mean all the support given to the sector during the pandemic “may have been wasted”.
Last week, energy regulator Ofgem said it would raise the price cap on household electricity bills by 80% in October.
But unlike households, businesses aren’t subject to a regulated energy price cap, meaning their bills are bound to climb even higher.
Tim Martin, founder of pub chain Wetherspoon, told the BBC his company had signed energy deals until September 2023.
In addition to the price crisis, breweries also fear a possible shortage of carbon dioxide (CO2), which is used in beer production.
CF Industries, the UK’s largest carbon producer, recently announced it would temporarily halt production at one of its plants because rising energy prices have made its costs too high.
Andrew Taylor, manager of Mr Fox pub in Croydon, said the price of cooking oil had tripled and food costs were “starting to rise sharply”.
He said his company would absorb many of the price increases, but warned he would eventually have to pass the cost on to customers.
“It’s incredibly worrying,” he added.
Emma McClarkin, chief executive of the BBPA, warned that rising energy bills could do more damage to the sector than the pandemic.
According to a report, 400 pubs in England and Wales closed last year and around 200 in the first half of 2022 as inflation began to threaten profits. This reduced the total number of pubs to the lowest level since records began in 2005.
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