A Christmas story

pubs and restaurants

As we approach the Christmas Holiday it is usually a time of year when pubs are gearing up for a bumper trading period and its one that certainly used to carry them through the very quiet January and February months. But that is no longer the case, the pandemic as we suspected was a tipping point for consumers and their behaviour has changed, in general they are going out earlier, certainly eating and drinking, but many pubs and restaurants are now empty by 9.30pm rather than trading up to midnight. There are certainly exceptions mainly in bigger venues aimed at younger drinkers and city centre bars, but here the younger clientele pre drink at home before going out later and then staying out later.

On top of this change of behaviour we have a cost-of-living crisis where household costs have gone up massively leaving less to spend in pubs, bars and restaurants and this has reinforced the changes in consumer behaviour.

For the small and micro business owners who run these pubs, bars and restaurants, many had debts anyway, but the last couple of years have increased the debt levels and eaten into any shock absorbing savings they had, leading to the generally fragile state of the hospitality industry, an increase in the living wage won’t help them as its just another increased cost.

In the meantime, many regional brewers want to keep their pubs open as they are shop windows for the beers they produce, but many of the big regulated pub owning businesses who are in my opinion now property companies see this situation as an opportunity to claim pubs in their estate are unviable and get planning approval for change of use, particularly on those pubs where the opportunity to develop housing or other business projects offer high returns are taken advantage of. Some go further as we saw in the crooked house pub which suffered a serious fire and demolition without any planning approval.

So, it’s a serious situation in the trade, summed up very simply and clearly by a friend and publican with years of experience in the trade, Dave Mountford.

Who says: –

“Beer duty is a complete red herring and always had been – in fact it is incredibly damaging as it misleads the consumer who expects their beer to drop in price or stay the same at the pub, when the publican hasn’t had any reduction passed on to them. Beer duty is a tax on the brewers of beer and reductions are hardly ever passed on to publicans. Since January 2023, wholesale prices from my suppliers have increased by on average 18 % and they will go up again next January, so as always beer duty is a pointless and completely misleading issue.

Business rates – whilst the 75 % discount remains in place, which means a few Pubs will survive for another year at least, the simple fact is that Business rates for Pubs have been over inflated for about 30 years due to the Governments application of the calculation that should in fact be based on the estimated turnover of the Pub, rather than the actual turnover, which is what normally happens. Our business rates are incorrect by about 50 % because the calculation used is based on my actual turnover rather than the turnover of a “reasonably efficient operator”. I have been penalised in effect because I am over achieving.

The increase in the hourly rate of £1.00 for staff will increase our wage bill for the next tax year by approximately £25,000, and the only way in which this can be recouped will be by redundancies and cost increases to pints of beer.

Reduction in NI Contributions for Self-employed people would be of use but unfortunately, despite turning over ¾ Million a year, our Pub does not make enough profit to afford to pay either myself or my wife a wage, and hasn’t for over 12 Months. I have a separate job which we would not survive without – the only reason we have kept the Pub operating is a sense of duty to our community and to pay off the Bounce back Loan.”

Dave Mountford.

The increase in whole sale prices, energy increase, wages and of course the Bounce back Loans we all took to survive COVID (due to the pathetic levels of support), have meant that there will be few Pubs left in this country very soon.

This Government have little understanding or in fact little interest, in the issues for the sector and unfortunately, we will lose a large number of potentially viable pubs as a result unless we do something”

Dave comments reflect the issues facing many micro and small business owners who operate pubs and this is why it’s so important that the micro business alliance continues to talk to government at all levels, makes them aware of the issues and the real solutions which would help these businesses to operate efficiently and ensure the survival of the UKs pub stocks, because once a community loses its local it won’t get it back!

Closing down of pubs
2023; More than 50 pubs are disappearing per month – independent.co.uk

2 Comments

  1. Ian Farrar on November 28, 2023 at 3:04 pm

    I really appreciate Dave providing an insight into the pub trade. Best of luck.

  2. Jill Poet on November 28, 2023 at 4:06 pm

    I’ve been a licencee, so I understand how challenging the pub trade is. My heart breaks for these individuals who have worked so hard for so many years and yet, due to circumstances totally outside of their control, are finding their livelihoods threated.

    Good luck, Dave – and anyone else in this situation. I know Ian Cass is working hard to ensure the politicians understand the reality of what is happening in the pub trade. In the meantime, I do hope its a good Christmas and a better 2024 for you.

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