Bosses at companies that own almost half of the UK’s 47,000 pubs said tenants had already given notice because they could not cope with energy bills, which are expected to more than quintuple in some cases. Unlike households, businesses do not benefit from a cap on what suppliers can charge for gas and electricity, leaving many businesses facing oblivion without government intervention. In a letter to the government and Tory leadership candidates Liz Truss and Rishi Sunak, the British Beer and Pub Association said massive job losses were inevitable without help for an industry employing 940,000 people. Nick Mackenzie, the chief executive of the 3,100-strong pub chain Greene King, said the hit to the energy bill came just as the sector is battling back from the ravages of the Covid-19 pandemic, which hit hospitality particularly hard and left many with debt penalties. “While the government has introduced measures to help households cope with this sharp rise in prices, businesses have to deal with it themselves and it will only get worse in the autumn,” Mackenzie said. “Without immediate government intervention to support the industry, we could face the prospect of pubs not being able to pay their bills, jobs being lost and local favorites across the country being forced to close their doors, which it means all the good work that goes into keeping pubs open. the pandemic could be lost.” His counterpart at St Austell Brewery, Kevin Georgel, said thousands of pubs could be forced to call last orders for good. Chris Jowsey, managing director of Admiral Taverns, said the impact was terrifying. He said: “One of our franchisees reluctantly gave notice to leave his pub after electricity costs rose by 450%, making it impossible to trade profitably. Let’s not forget that for most licensees the pub is not only their business but also their family home.’ Unlike households, pubs and other small businesses usually buy their energy from suppliers on long-term, fixed-price contracts, which are often renewed at this time of year for an October start date. Some reported being told their supplier is no longer willing to offer a fixed rate contract to hosting businesses because they fear the customer will back out. This leaves them at “deemed” off-contract prices, which can skyrocket in line with wholesale markets. Other pubs said they were told by their supplier to put down a £10,000 deposit if they wanted a contract, or received offers that set their energy costs up sixfold. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. I thought I’d let you know about the latest ‘best’ energy deal available for a pub of our size. We paid 15p/unit in May. This is the best deal available today. pic.twitter.com/2r5HmCcKns — The Rose and Crown (@RoseAndCrownBeb) August 27, 2022 The squeeze has been exacerbated by hyperinflationary increases in other costs, such as aluminum for beer cans and carbon dioxide used in bottling and canning. Mark Holden owns three pubs in Cornwall, including the Norway Inn in Truro. He had a long-term gas contract in place until November 2023, with estimated bills of £5,800, until his supplier dropped and he was put on an emergency contract with a new supplier at £24,000. Until then, he had invested in gas cookers, while otherwise he would have opted for induction hobs. “I think this will be the biggest challenge this industry has faced, including the financial crisis of 2008-10 and Covid. This is going to be something that knocks them out of the park,” he said. “As an industry we are heading for the edge in April, particularly if business rates return to 100% without support. That would be the death of the industry.”
