Campaign for Pubs
Chancellor must step in with an emergency package of support to save UK pubs and small brewers from the cost-of-living crisis
The Campaign has written to the Chancellor and called on the Government to understand the serious threat to pubs, which are now facing a perfect storm of dramatically rising costs, especially energy costs, and at the same time a customer base having to reduce their own spending. The Campaign also made a submission to the budget consultation expressing the same concerns.
Pub closures are a real worry. In mid-February, accountancy firm UHY Hacker Young revealed that insolvencies jumped from 280 in 2020/21 to 512 in the year ended 31 December 2022. That follows data from AlixPartners and CGA by NielsenIQ that showed nearly 18 net closures every day in the fourth quarter of 2022.
At the same time, small breweries have been closing at a rate never seen before, with over 85 breweries having closed their doors over the last year and warnings that even more will stop trading without Government support, further eroding the diversity of the UK brewing sector.
Costs for pubs and for brewers, especially energy and product costs, continue to rise significantly alongside a cost-of-living crisis that reduces customer spending. This is made worse by the fact that pubs are having to pass on at least some of the rising costs faced by brewers and other suppliers, making visits even less affordable to those on lower and middle incomes.
At the moment, the Treasury plans to cut the energy bill support for businesses, something that could push more pubs and breweries out of business. These are small businesses that have made it through the COVID crisis and would be viable if it were not for the maelstrom of current challenges. There is a real danger that the next 6 months could change the face of the British beer and hospitality sector and see hundreds more communities lose pubs, simply because of a short term crisis and inadequate Government support. The current level of support is simply inadequate and the survival of many pub businesses and small brewers now depends upon decisive and properly targeted Government action focused on the small businesses that urgently need it to discharge their role as competitor SMEs, rather than huge multinational chains that do not.
The Campaign is urging the Chancellor urge to address the very serious situation and deliver a package of direct and targeted support that will enable pubs and small brewers to get through this cost-of-living crisis:
- Continued support for energy bills for small businesses.
- VAT of 5% on all hospitality/on-trade sales for 12 months to benefit all pubs, not just those that sell food or provide overnight accommodation, but also important smaller wet-led community-orientated pubs
- Reduce the Flat Rate for VAT.
- Extension of zero business rates for the next fiscal year and a revision for 2023/24
- Extend business rates relief to small brewers and producers, who have not had any such support.
Paul Crossman, Chair of the Campaign for Pubs and a publican in York said:
“The current situation for our pubs and brewers is truly dire, as evidenced by the spiralling rate of small business closures in the sector. Without significant and immediate Government support in the face of this ongoing crisis we will see the imminent loss of a huge number of our most precious and characterful local venues and independent regional producers.
“The choices made by the Chancellor in this Budget look set to be the difference between thousands of jobs and businesses being preserved for the future or being sacrificed along with the vital cultural and economic contribution they make to communities across the UK. This is a decisive moment for the Government to show what they really think of our revered and world famous pub and beer industry.“
Dawn Hopkins, Vice-Chair of the Campaign for Pubs and a publican in Norwich said:
“The current level of Government support is simply inadequate and the survival of many pub businesses and small brewers now depends upon decisive and properly targeted Government action.
“Without further support to get through the cost-of-living crisis, including tackling the spiralling energy costs, many publicans and small breweries will struggle to get through the next six months. The Chancellor says the Government “cannot afford” any more support for businesses, yet without this more publicans and brewers will have no choice but to close the doors and that means job losses and a blow to the economy locally and nationally. It’s time for the Chancellor to show whether or not he and the Government care about pubs and small brewers or not, and we urge him to listen and act”.”
Phil Saltonstall, brewer representative of the Campaign for Pubs and founder of Brass Castle Brewery said:
“The British beer industry is of national cultural importance and an iconic international brand. Small brewers provide local colour to communities and the beer sector’s best hopes for exporting our famous national drink around the world.
“Small brewers and pubs have a symbiotic relationship that is vital for them both to endure and continue to offer a diverse and interesting consumer experience. In addition to raised energy, ingredient and distribution costs, the UK’s small brewers will soon also have to contend with changes to the UK duty system in favour of larger multinationals with economies of scale, and the Deposit Return Scheme in Scotland which manifestly favours bigger – usually off-shored – brands. If the Government values the UK’s long held reputation for beer excellence, heritage, range and innovation, then it must act now to safeguard that resource over allowing a slide towards faceless chain pubs and mass-market beer mediocrity.”