As energy costs rise, 70% of pubs don’t expect to survive winter

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As energy costs rise, 70% of pubs don’t expect to survive winter, Independent brewers in Britain have pleaded with the government to save the industry by lowering energy prices since data shows that 70 percent of pubs will close if they can’t make it through the winter.

Independent brewers warned of “severe uncertainty” in a formerly vibrant cottage industry in a letter to Nadhim Zahawi, the chancellor, on Tuesday.

Increasing energy costs, they argued, were having a multiplicative effect on other factors, such as falling sales as consumers cut down on spending, shortages of equipment like kegs, cans, and CO2 gas, and a poor hop harvest that was driving up prices.

“We have entered one of the most critical eras for the brewing sector,” the Society of Independent Brewers wrote in a letter co-signed by the chair of the Campaign for Real Ale. “Small brewers are claiming that their energy expenses are doubling or trebling, putting their future ability to brew at peril,”

The warning was issued at the same time that the cost of electricity for pubs increased, with some providers reportedly refusing to grant new contracts out of concern that the industry might not be able to pay its bills.

According to a poll conducted by the Morning Advertiser, over 35% of business owners reported seeing utility expenses double, and 30% reported seeing costs treble.

One business owner reported being quoted a price for their energy that was over six times higher than their present contract, with the price per unit skyrocketing from 14 pence to 83 pence.

Almost three-quarters of people who responded stated they could not afford the increases.

Pub owners and brewers want the government to cut taxes and fees, cap energy costs for small businesses and fund renewable energy projects so that their industries don’t suffer any further.

Pubs are facing a “doomsday situation,” according to Heath Ball, general director of the Frisco Group, which owns and manages three watering holes in the southeast of England.

‘This energy bill crisis comes on the back of the most difficult of times as companies struggle to recover from the Covid disaster and I think it offers an even larger threat to the viability of pubs,’ he told the Morning Advertiser.

He also said that even companies that could afford the higher rates were being denied new power contracts because of the industry’s “high risk” reputation. Ball warned that unless the government “finds a solution to this quickly,” many bars and restaurants would be forced to close.

About 700 small, independent breweries in the UK are represented by the Society of Independent Brewers. This includes breweries like Five Points in London, Magic Dragon in Wales, and Gorilla in Yorkshire.

It stated that some 160 small breweries had closed down due to the coronavirus lockdown and that another 40 had been forced to shut down this year alone. Those who made it out have averaged £30,000 in debt that they must now begin paying back.

The “draught relief” program, a 5% drop in the duty on beer sold in pubs proposed by Rishi Sunak in last year’s budget, has been delayed, causing anxiety, as stated in the letter to Zahawi.

It was revealed in July that the Treasury’s study of alcohol duty would not be completed until the fall.

It was said in the letter that “many brewers have already factored in these duty changes into their planning for next year, but do not know if they will happen on time.”

Pub-goers and beer-drinkers alike want the government to take swift action, according to Camra chair Nik Antona.

With businesses having pulled out all the stops to weather the epidemic, it would be a tragedy if more of our local, small, and independent breweries were forced to close permanently now due to the crisis with the cost of energy, commodities, and doing business.

More than half of firms anticipate stagnation, shrinkage, or closure in the next 12 months, according to research from the Federation of Small Businesses (FSB), which has been repeatedly warning about the impact of rising energy prices on Britain’s high streets and small businesses.

The energy price cap, which limits the amount suppliers can charge homes, does not now apply to small merchants, who collectively employ some 16 million people.

The number of firms in the United Kingdom dropped by 20,200 in the second quarter of this year, the greatest quarterly drop in at least five years, according to data from the Office for National Statistics.

Policy and advocacy head of the FSB Tina McKenzie warned last week, “Without intervention, we are facing a generation of lost firms, jobs, and potential.”

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