News

Pubs and breweries warn of closure over 300% rise in energy bills

"The government needs to extend the energy cap to business as well as households."

Emily Sergeant - 30th August 2022

Industry leaders are warning that pubs and breweries across the UK are on the brink of closure as some energy bills are feared to rise by up 300%.

With the energy price cap set to increase once again in October, and the rising cost of living crisis continuing to make its impact felt nationwide, bosses of six of the UK’s biggest pub and brewing companies have penned and signed an open letter to the government urging it to act in order to avoid “real and serious irreversible” damage to the sector.

The bosses of Greene King, JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan, and St Austell Brewery have all signed the letter.

They all sit on the board of British Beer and Pub Association (BBPA).

The letter has been penned because, while domestic customers are facing an 80% increase in average bills in October, businesses operate without a regulated price cap, and this is said to be leaving pub owners struggling to find suppliers willing to power their venues when contracts come up for renewal.

Read more: Inflation hits another new 40-year UK high of 10.1% as cost of living crisis worsens

One regional pub had seen their energy bill jump £33,000 for the year, according to Nick Mackenzie, chief executive officer of the Greene King Group – which has more than 2,700 pubs across the country.

“While the government has introduced measures to help households cope with this spike in prices, businesses are having to face this alone, and it is only going to get worse come the autumn,” Mr Mackenzie explained.

“Without immediate government intervention to support the sector, we could face the prospect of pubs being unable to pay their bills, jobs being lost and beloved locals across the country forced to close their doors, meaning all the good work done to keep pubs open during the pandemic could be wasted.”

The six pub and brewery group bosses have demanded the government implement an urgent support package that would be similar to capping the price of energy for businesses.

“We have publicans who are experiencing 300% + increases in energy costs and some energy companies are refusing to even quote for supply,” added William Lees Jones – Managing Director of JW Lees .

“In some instances, tenants are giving us notice since their businesses do not stack up with energy at these costs. These are not just pubs but people’s homes and the hearts of the communities that they sit in. 

“Government needs to extend the energy cap to business as well as households.”

In response to the open letter, a government spokesperson said: “No government can control the global factors pushing up the price of energy and other business costs, but we will continue to support the hospitality sector in navigating the months ahead.

“That includes providing a 50% business rates relief for businesses across the UK, freezing alcohol duty rates on beer, cider, wine and spirits and reducing employer national insurance.

“This is in addition to the billions in grants and loans offered throughout the pandemic.”

Featured Image – Amie Johnson (via Unsplash)