The British Institute of Innkeeping (BII) has written to the Chancellor and the Secretary of State for BEIS to call for urgent support from the government due to the impact of the energy crisis on independent pub businesses.
Licensees are struggling with inflationary costs, staff shortages, and declining consumer confidence whilst trying to recover from the pandemic, the BII argued.
Rising energy costs topped the list of factors impacting the profitability of pub businesses in a recent survey by the BII. With no cap in place for energy bills for businesses, BII members have reported increases of 300% or more on existing payments, threatening the survival of their businesses, the organisation has said.
Three in four independent pub operators are still trading below 2019 levels, with 86% reporting lower profits and many repaying pandemic-specific debts at an average of £40,000 per pub, according to the BII.
Steve Alton, CEO, said: “Our members have been working tirelessly to maintain pubs as accessible and affordable safe spaces for all, at the heart of their communities across the UK, absorbing as much of the inflationary costs placed on their businesses as possible.
“We have seen a sharp rise in calls to our helplines, with members uncertain of how to navigate the challenges facing them, the majority of whom are seeing unsustainable cost increases across every area of their businesses, but rising energy bills are the top concern at the moment.
“Even at the height of summer, the busiest time of year for pubs, licensees are now seriously considering the sustainability of their businesses, as the astronomical rising cost of business is undermining any recovery they may have already made. To be clear, the huge impact of rising energy bills alone will be enough to destroy many of these much loved and needed small businesses, providing vital social connection for so many.
“The crisis now facing our members is just as damaging as the impact of the pandemic. Without support, the rise in energy bills and further cost increases will cripple these viable businesses, risking lost jobs and careers, Government loans being written off, and the loss of essential, accessible places that connect us all in our communities.
“We have called on Government for urgent short-term support to allow these vital businesses, supporting local jobs and livelihoods in every community, to weather these exceptional costs of doing business.
“They now urgently need immediate support with energy bills via grants and a cap on future increases, alongside a waiver of business rates for 23/24 as well as a more meaningful cut to the differential rate of duty on beer applied to smaller container sizes. Alongside these measures, there need to be measures in place to stimulate consumer spending, all of which will allow them time to start their recovery.
“Pubs are an essential component of growth, regeneration and levelling up across the UK and without support, their contribution to skilled jobs, local investment and supporting local suppliers will be lost, in many cases, forever. Government must act now to ensure the survival of these vital community businesses.”
