A quarter of UK pubs could fold by April next year the British Beer and Pub Association (BBPA) has warned, as around 25% of its members reported that their business was “not sustainable” beyond the end of the financial year.
According to a survey conducted by the UK trade brewery and pub association, 37% of its members said they were still struggling to break even or turn a profit a month after the easing of lockdown restrictions in England.
The BBPA said that measures introduced by the government to mitigate the danger of spreading Covid-19, which include ‘1 metre plus’ social distancing in all pubs, one way systems, dividing screens and table service, are impacting the viability of reopened pubs, by reducing capacity. They are also being adversely affected by consumer confidence which is only gradually starting to return.
While some government measures have already been introduction to help the hospitality and pub sector, including the ‘Eat Out To Help Out’ scheme and a cut in VAT on food and accommodation in the hospitality and pubs sector, which it is hoped will provide a boost to August’s figures, the BBPA said the government needs to help build public confidence to go out and visit pubs and hospitality again, with consistent and positive messaging about their reopening.
It said further support for the sector was needed in the medium and longer term to enable them to fully recover, with pubs in cities affected by the reduced footfall as office workers continued to work from home, and community pubs, which tend to only sell drinks or small food items, unable to benefit from the new schemes.
Emma McClarkin, chief executive of the BBPA, called on the government to cut beer duty and reform business rates in order to support the sector.
“£1 in every £3 spent in a pub goes to the taxman and now is the time to reinvest that money in our brewers and pubs. That means cutting beer duty by 25%, as well as making the VAT cut permanent and extending it to beer in pubs to bring the cost of a pint down and unlock investment,” she said.
“Fundamental reform is also needed of the business rates system – pubs pay 2.8% of the business rates bill, despite accounting for just 0.5% of turnover.”
She said the sector was a resilient one, but it was time to invest.
“75% of brewing and pub businesses say they are sustainable at present, but that still leaves 25% that are struggling and it would be catastrophic for our culture and economy if they are denied the support they need.
“Now is the time to recognise and invest in our pubs and brewers to secure them for future generations and to enable growth.”