A combination of energy costs, business rates, and tax pressures are pushing pubs to the brink, with another 750 pubs forecast to close in the first half of 2024, according to a report by Frontier Economics.

The British Beer and Pub Association (BBPA) has called for immediate government action in the face of the new report, which forecasts energy bills combined with tighter consumer spending, continued price volatility due to geopolitical tensions, a £12,000 business rates increase, and a beer tax hike will contribute to further closures.

With pub closures in England, Wales, and Scotland having spiked by 75% in the first half of 2023, the continuation of that trend will result in c750 pubs calling last orders in the first half of next year, the report predicts.

The BBPA is calling on the government to extend small business rates relief, rule out an increase in beer duty, and implement the recommendations of Ofgem’s review of the non-domestic energy market.

Despite energy prices remaining the number one reason for closures – with energy bills expected to be almost £20,000 higher over the year – the government significantly scaled back support for pubs earlier this year, according to the BBPA.

The trade body had further highlighted that beer prices have risen 12% since 2019 despite a 43% overall cost increase for pubs in the same period.

Tim Black, associate director of Frontier Economics, said: “The economic pressures facing the pub and brewing sector remain substantial, as our latest report shows. Record cost inflation has had to be passed on through higher prices for businesses to survive, despite consumers cutting back on spending due to severe cost of living pressures. While inflation rates have eased, costs & prices are not expected to fall back to earlier levels, and consumers continue to face very tight budgets. Meanwhile as government support measures on energy and business rates tail off, and alcohol duty is raised, this creates further cost pressures to manage.

“The sector is working to mitigate and adapt, but some business failure is inevitable. It may be important to look for areas where targeted support can help to offset the worst of this, given the key role the sector plays in communities across the UK.”

Emma McClarkin, chief executive of the BBPA, said: “The crisis our pubs and brewers are facing in paying their sky-high energy bills never went away, and the cliff-edge faced earlier this year as the Government withdrew support means pubs will again face a struggle to afford to keep the lights on and the bar warm this winter. Meanwhile, they also face on average per pub a £12000 increase in business rates next April and a tax hike of an unknown amount. These are economic circumstances no sector could wholly survive.

“The Government must intervene to stop the decimation of our sector, and the jobs and prosperity it brings to towns and villages across the country. By ruling out the massive increase in business rates and beer duty both scheduled for next April and implementing the recommendations of Ofgem for regulation of the non-domestic energy market, the Government has the chance to return pubs to the invaluable engines of truly nationwide economic growth that they have potential to be.”