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30th Aug 2022

Landlords warn of mass pub closures ‘within months’ as energy bills make trade unsustainable

Jack Peat

Pubs are facing price hikes upwards of 300 per cent

Landlords have warned of imminent pub closures amid a dramatic spike in the price of energy.

Bosses from the UK’s six biggest pub and brewing companies have signed an open letter to the Government urging it to act in order to avoid “real and serious irreversible” damage to the trade.

Greene King, JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan and St Austell Brewery all sounded the alarm on Tuesday.

Out of control gas prices following the invasion of Ukraine by Russia have contributed to rocketing energy bills for operators.

On Friday, regulator Ofgem confirmed that bills for an average UK household would surge by 80 per cent in October when the new price cap comes into force.

However, businesses operate without a regulated price cap, with some pub owners warning that their bills have quadrupled or are struggling to even find suppliers willing to power their venues when contracts come up for renewal.

William Lees Jones, managing director of the JW Lees pub group, said: “We have publicans who are experiencing 300 per cent plus increases in energy costs and some energy companies are refusing to even quote for supply.

“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.”

Nick Mackenzie, chief executive officer of 2,700-strong group Greene King, said one tenant has seen their energy bill jump £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.”

The bosses, who sit on the board of British Beer and Pub Association (BBPA) have demanded the Government implement an urgent support package that effectively caps the price of energy for businesses.

It comes as beer drinkers were given a four month warning as the price of a pint is set to soar.

Industry experts say that by 2023, beers in London could rise to £9, with other areas also likely to be forced to hike their prices.

“The double whammy of cost and availability issues is piling huge pressure on operators’ margins”, Karl Chessell, of CGA, said.

“Combined with the growing cost-of-living crisis for consumers, it means trading conditions will be very tough over the remainder of 2022.”

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