Information on Cookies

To make the best use of our website, you'll need to make sure your web browser is set to accept cookies to ensure you receive the best experience.

For further information, please read our Cookies Policy.

Log In

Go To News
UK pubs brace for mass closures as energy costs soar Published Date: 11/09/2022

Almost two thirds of British hospitality businesses are currently in the red, according to research from the BBPA, the British Institute of Innkeeping, and UK Hospitality.

"It is extraordinarily difficult to see how good local community pubs are going to find their way through," said Emma McClarkin, chief executive officer of the British Beer and Pub Association (BBPA).

More than 400 British pubs closed down last year in the wake of pandemic lockdowns, according to a British real estate analysis company, and that number could increase substantially in light of the energy cost crises.

Figures from energy analysts Cornwall Insight show that small UK businesses negotiating new energy contracts for the winter face on average a four- or five-fold price increase compared with deals made two years ago.

Reuters reported that major publicly listed pub owners including Mitchells & Butlers and J D Wetherspoon have reported slower sales growth and potential losses this year due to rising costs.

In addition to the energecy cost crises, pubs and other hospitality venues are also stuggling with surging consumer price inflation - which reached a 40-year high of 10.1% in July and is set to rise further - will also limit the amount of money custoenrs have to spend on going out.

As well as correspondingly higher costs for key inputs to the brewing process such as hops and carbon dioxide, pubs are - like much of British industry - also facing rising staff costs.

All of this against the backdrop of the Bank of England forecasting Britain's economy will fall into recession later this year and remain there throughout 2023.

UKHospitality CEO, Kate Nicholls, said:

“The hospitality sector is critical to our national economic and social recovery and with support will be well placed to drive growth, generate jobs and invest in local communities. To achieve this however, the new Government needs to act quickly to address the soaring energy costs that are strangling the sector.

“We are encouraged by talk of energy price freezes for families and businesses but this won’t be enough to save hundreds of businesses and thousands of jobs in the sector. The package of five measures we are asking for will help us guarantee jobs and wages, to ensure that businesses stay afloat, and to preserve and grow our communities across the UK.”

300 hospitality CEOs have signed a letter asking the Chancellor to urgently deliver a package of support. The letter proposes a five-point plan of action through to April 2023, with a review in early 2023:

  • A 10% headline VAT rate for hospitality
  • A business rates holiday for all hospitality premises, with no caps applied
  • Deferral of all environmental levies
  • Reinstatement of a generous HMRC Time to Pay scheme
  • Reintroduction of a trade credit insurance scheme for energy