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Pubs Warn Of Closure As Energy Bills Face 300% Rise

August 30, 2022

Pubs across the UK will be forced to close due to energy costs soaring by as much as 300%, brewery bosses warned.

Leaders of six of the country's largest breweries called on the government for "immediate government intervention" on sky-high energy bills this winter.

Unlike households, businesses aren't covered by a regulated energy price cap, meaning bills are higher.

Pub owners said the energy crisis would cause "real and serious irreversible" damage to the industry without support.

The 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 urged immediate intervention, including a support package and a cap on the price of energy for businesses.

Chris Jowsey, boss of Admiral Taverns which has 1,600 pubs, said his tenanted pubs now pay more in energy bills than they do in rent.

He told the BBC's Today programme that one of his tenants wrote to him saying he was leaving after 20 years due to his electricity bill going up 450% - an increase so large he couldn't pass onto customers.

Mr Jowsey said breweries were now having to bypass energy suppliers and buy directly from the wholesale market due to companies not being willing to supply the sector, which uses high amounts of energy.

In a statement the Department for Business, Energy and Industry said "no government" would be able to control the "global factors pushing up the price of energy and other business costs".

"But we will continue to support the hospitality sector in navigating the months ahead," a spokesman added.

"That includes providing a 50% business rates relief for businesses across the UK, freezing alcohol duty rates on beer, cider, wine and spirits and reducing employer national insurance. This is in addition to the billions in grants and loans offered throughout the pandemic."

The government has previously said no policy will be announced until the new prime minister is announced on 5 September.

Mr Jowsey said that he had personally raised the issue of high energy prices with ministers more than six months ago: "And I find it incredible that we have to wait for one person to get elected before we actually get some decisions and some policy which will protect not just jobs, not just people's livelihoods, but also their homes because remember most people that run pubs in this country actually live above the shop," he said.


'It's going to be really tough'

At The Plough in Essex, landlord Simon Cleary said his energy bills have spiralled from £13,000 to £35,000 a year.

He said the pub needs to generate a further £1,800 in weekly takings to cover the costs. "It really is that bad," he told the BBC.

"I think it's going to be really tough unless there is intervention from the government," added Mr Cleary.

Nick Mackenzie, the boss of Greene King - one of the UK's largest pub groups, with over 3,100 pubs - said the company could face "the prospect of pubs being unable to pay their bills, jobs being lost and beloved locals across the country forced to close their doors".

He added they would mean all the support given to pubs through the pandemic to stay in businesses "could be wasted".

Meanwhile, William Lees Jones, of JW Lees, said the government needed to extend the energy cap to business as well as households.

Energy price cap
On Friday the energy regulator Ofgem, which sets the price cap on household bills, said it would rise by 80% in October.

Many energy intensive businesses across various sectors will also face cost pressures that could be passed on to consumers through higher prices.

Aside from bills, breweries also highlighted a possible shortage of carbon dioxide (CO2) which is used in the production of beer.

CF Industries, the UK's largest CO2 producer, recently announced that it would temporarily stop production at one of its plants because rising energy prices made it too expensive to continue.

Emma McClarkin, chief executive of the BBPA, warned that the rise in energy bills would cause more damage to the industry than the pandemic did if it didn't receive support in the next few weeks.

"There are pubs that weathered the storm of the past two years that now face closure because of rocketing energy bills for both them and their customers," she added.

It comes as the number of pubs in England and Wales continues to fall, hitting its lowest level on record, according to new analysis.

The research found that there were 39,970 pubs in June, down by more than 7,000 since 2012.

According to Altus, who compiled the report, 400 pubs in England and Wales closed last year and some 200 shut in the first half of 2022 as inflation started to eat in to profits. That brought the total number of pubs down to its lowest since Altus's records began in 2005.

























Source: BBC
Image source: Pexels