Brewery executives have stated that pubs across the United Kingdom will be forced to close due to energy costs increasing by up to 300 percent.
This winter, six of the nation’s major breweries have asked for “urgent government involvement” in response to skyrocketing energy costs.
The landlord of one tavern in Essex informed that his annual energy bills had increased from approximately £13,000 to £35,000.
Without support, pub owners stated that the energy crisis will do “real and severe permanent damage” to the sector.
The British Beer and Pub Association is governed by the pub and brewery owners of six companies: JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan, Greene King, and St Austell Brewery (BBPA).
In an open letter to the government, they demanded immediate action, including a support package and an energy price cap for enterprises.
Analysis reveals that the number of pubs in England and Wales touched a historic low of 39,970 in June, as energy costs skyrocket and pubs close.
Simon Cleary, the proprietor of the Plough in Great Chesterford, Essex, reported that his annual gas and electricity expenses had nearly tripled to £35,000.
It implies that the bar must now produce an additional $1,800 every week to cover its expenses.
“It is true that horrible,” he told. “I believe it will be extremely difficult unless the government intervenes.”
Chris Jowsey, the chief executive officer of Admiral Taverns, which operates 1,600 pubs, stated that his tenanted pubs now pay more in energy expenditures than in rent.
He told that one of his tenants had informed him that he was leaving after 20 years owing to a 450% increase in his electricity cost, an increase so huge that he was unable to pass it on to his customers.
Mr. Jowsey stated that Admiral was investing in energy-efficient technology for beer cellars and to regulate refrigerator energy consumption. In addition, he stated that the corporation was “considering a plan to purchase energy in bulk and permit licensees to use our scale.”
He then stated: “Even when we approached the energy market in recent months, nobody was ready to supply us, let alone a single licensee and their bar.
Mr. Jowsey stated, “As a result, we’re doing everything we can.” “However, this is of such a magnitude that even we cannot support it on our own; we need government involvement desperately because the market is broken.”
The Department of Business, Energy, and Industrial Strategy stated that “no government” would be able to manage “global causes driving higher energy and other business expenses.
A spokesperson added, “However, we will continue to assist the hospitality industry in navigating the next months.” The government said that it would provide a 50% reduction in business rates across the United Kingdom, freeze alcohol tax rates on beer, cider, wine, and spirits, and reduce employer national insurance.
“Awaiting the PM”
The government has already stated that no policy announcements will be made until the new prime minister is named on September 5.
Mr. Jowsey stated that he raised the issue of high energy costs with ministers over six months ago.
“I find it amazing that we have to wait for one person to be elected before we get some decisions and some policy that will protect not only employment, not only people’s livelihoods but also their homes,” he added.
Nick Mackenzie, the chief executive officer of Greene King, one of the largest pub groups in the United Kingdom with over 3,100 pubs, stated that the company could face “the prospect of pubs being unable to pay their bills, jobs being lost, and beloved locals across the country being forced to close their doors.”
All the aid offered to pubs during the pandemic to help them remain open “may be wasted,” he continued.
William Lees Jones of JW Lees stated that the government should extend the energy cap to include businesses in addition to families.
The energy regulator Ofgem, which sets the price cap on home bills, announced on Friday that it will increase by 80% in October.
But unlike homes, corporations are not subject to a price restriction on energy, therefore their rates are significantly higher.
In addition to bills, brewers reported a possible carbon dioxide (CO2) shortage, which is required in the manufacturing of beer.
CF Industries, the largest CO2 generator in the United Kingdom, recently announced that it would temporarily cease production at one of its sites due to the growing cost of energy.
Andrew Taylor, managing director of Mr. Fox, a bar in Croydon, stated that although his energy and gas prices were increasing, the price of cooking oil had tripled and food costs were “rapidly rising.”
He stated that the company was absorbing a significant portion of the price increases, but warned he would eventually have to pass on the expenses to customers.
It is quite alarming, “he continued.
Emma McClarkin, chief executive of the BBPA, warned that if the industry does not receive support within the next three weeks, the surge in energy costs may inflict more damage than the pandemic.
According to Altus, who created the analysis, 400 pubs in England and Wales closed last year, with another 200 expected to close in the first half of 2022, as inflation began to eat away at profits. This marked the lowest number of pubs since Altus began keeping records in 2005.
