Thousands of pubs to shut amid cost of living crisis chaos as energy bills double

Leading pub and brewery bosses are warning of time being called within months on the nation’s locals amid energy price hikes of up to 400%.

The heads of six of the UK’s biggest companies fear soaring costs are more of a danger to the great British institution than the Covid crisis, when pubs were forced to remain shut for long spells.

With looming closures and the threat of job losses, business leaders have signed an open letter to the Government urging it to act now to avoid “real and serious irreversible” damage to the industry.

Greene King, JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan and St Austell Brewery have all sounded the alarm as out of control gas prices following the invasion of Ukraine by Russia have left pub landlords and tenants facing crippling energy bills.

Unlike domestic energy prices, businesses do not benefit from price caps – even though regulator Ofgem last week hiked its limit on household bills by 80% from October.

Now family brewers and big brands have banded together to call for an emergency support package to save our pubs.

Nick Mackenzie, chief executive of 2,700-strong group Greene King, revealed one tenant has been hit with an energy bill rise of £33,000 for the year.

He said: “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.

“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.”

Kevin Georgel, chief executive of St Austell Brewery, said: “Having survived the unprecedented challenges arising from the pandemic, pubs and breweries are once again faced with an existential threat because of circumstances beyond their control.

“The cost of energy threatens to cause mass business failure and the loss of thousands of pubs across the country.

“As an example, one of our tenants – whose current gas contract is ending next week – was quoted yesterday with a 417% increase on what he currently pays for a one-year fixed price deal.”

William Lees Jones, managing director of the JW Lees pub group, said: “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.”

And Paul Davies, boss of industry giant Carlsberg Marstons, added: “The UK’s brewing industry is facing a crisis far graver than that which we faced during the Covid lockdowns of the past few years.

“We have seen surging commodity prices and a doubling in the cost of malt, as well as C02, gas and energy costs nearly tripling since 2019.”

Pubs are already going under and landlady Miranda Richardson has called time on her village pub after her energy bills rocketed from £48,000 to £112,000 in a year.

She made the heartbreaking decision to close the Live & Let Live in Harpole, Northants and said: “Just to break even I’d have to sell roughly 1,400 pints a week. On average we sell 400-500 and that’s when we’re busy.

“The bigger chains will survive but the smaller community ones are not going to be able to cut it.”

Mark Bentham, owner of the Beer Box micropub, Bamber Bridge, Preston, Lancs has seen the number of customers plummet as the cost of living crisis squeezes family budgets.

After 25 years in the business, he is unsure if the Beer Box will make it to Christmas.

He said: “It’s been really hard. It’s the height of summer and we’re currently trading like it’s the middle of winter. The footfall just isn’t there because people can’t afford to go out.

“It’s not like people aren’t supporting local businesses either, I still see our regulars, but they just can’t buy as many drinks, or stay as long as they used to. People are drinking at home to save money.”

According to research by trade magazine The Morning Advertiser, seven in 10 pubs could shut for good this winter because of rocketing energy bills.

The survey found over 65% of pub and bar operators have seen their utility costs more than double.

Of those 30% reported a jump of 200% and 8% increases of more than 500%.

Emma McClarkin, chief executive of industry body the British Beer and Pub Association, said: “This rise in energy costs will cause more damage to our industry than the pandemic did if nothing is done in the next few weeks, consumers will now be thinking even more carefully about where they spend their money.

“There are pubs that weathered the storm of the past two years that now face closure because of rocketing energy bills for both them and their customers.”

The grim outlook for British pubs comes as soaring energy costs have also halted production at a major carbon dioxide plant, which will impact brewers and pubs, as CO2 is used in the production of some beer.

Separately, Tim Martin chairman of JD Wetherspoon is calling on the Government to slash VAT for pubs so struggling landlords can compete with supermarkets.

He said VAT at 20% was behind a “catastrophic loss of trade” made worse by the pandemic which led to Brits buying their booze from supermarkets – a trend which has become increasingly difficult to reverse.

Mr Martin said: “Supermarkets, which stayed open during the various national and regional lockdowns, temporarily grabbed 100%, more or less, of beer sales.

“We humans are creatures of habit of course, so once we’d got used to drinking at home, on the beach, in the park or in a pal’s garden, it was far harder to persuade people to return to the pub than most imagined, especially given the whopping price advantage that supermarkets have.

“If pubs are to survive and thrive in the future, generating a huge number of jobs, as well as vast funds for the Treasury, they have to be treated fairly.

“Fairness means tax equality with supermarkets.

“Anything short of that means continuing decline for a once great British institution.”

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