Pubs hit by the pandemic are facing a huge challenge on their energy bills There is no price ceiling for the increase in business energy prices The UK’s new prime minister is under immediate pressure to act
LONDON, Sept 1 (Reuters) – Like thousands of pubs across Britain, the Red Lion and Sun fears financial ruin this winter as its energy costs rise, just as business was beginning to recover from years of the COVID pandemic -19. Nestled in a leafy north London suburb, the pub’s annual energy bill will more than quadruple this year to 65,000 pounds ($76,000) from 16,000 pounds, said James Cuthbertson, director of The Frisco Group, which runs the pub along with two others in the capital. and south-east England. “We need to have an extra £50,000 in profits every year at the same time as profits are stagnating as consumers see their own prices rise at home,” he said. Sign up now for FREE unlimited access to Reuters.comSign up The dilemma of the Red Lion and the Sun is typical. Figures from energy analysts Cornwall Insight show that UK small businesses negotiating new energy contracts for the winter are facing an average four- or five-fold increase in prices compared to deals made two years ago. Over the same period, UK wholesale gas prices have risen 14 times, including doubling since Russia invaded Ukraine in February. For Cuthbertson and others in his position, the choice is between raising prices, cutting staff, reducing hours or closing entirely. More than 400 British pubs closed last year due to the pandemic lockdown, according to a UK property analytics firm, and that number could rise. “It is extremely difficult to see how good local community pubs will find their way,” said Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA). Almost two-thirds of UK hospitality businesses are currently in the red, according to research by the BBPA, the British Inn Institute and UK Hospitality.
LUNCH PUB WITH WATER
Cuthbertson said the Red Lion and Sun had cut back on lighting and he could not rule out closing for the winter. Keris de Villiers, who owns three pubs in south London, said increasing prices, even by 20p a pint, would really affect her patrons. “Many … are elderly and struggling to afford to heat their homes,” he said. Rising consumer price inflation – which hit a 40-year high of 10.1% in July and is set to rise further – will also limit the amount of money Britons have to spend to go out. As well as correspondingly higher costs for key inputs to the brewing process, such as hops and carbon dioxide, pubs – like much of the UK industry – are also facing rising staff costs. The Bank of England predicts that the UK economy will slip into recession later this year and remain there throughout 2023. “Trips to the pub will be few and far between in the coming months,” predicted Hargreaves Lansdown analyst Susannah Streeter. Drinkers at the Red Lion and Sun were already down, Cuthbertson said. “I’ve seen three of our regulars in one day choose tap water to go with their lunch,” he said. “I’d only seen it maybe once a month before that.” Further up the food chain, major listed pub owners including Mitchells & Butlers ( MAB.L ) and JD Wetherspoon ( JDW.L ) reported slower sales growth and possible losses this year due to rising costs. read more When British pubs and bars closed completely during the COVID-19 pandemic, the state stepped in with emergency funds. Today, any such intervention remains uncertain, as the government has said no new policies will be decided before a new prime minister is announced on September 5. “I’m lying in bed at night worrying how the hell I’m going to stay afloat,” Cuthbertson said. ($1 = 0.8599 pounds) Sign up now for FREE unlimited access to Reuters.comSign up Additional reporting by Yadarisa Shabong in Bengaluru. edited by David Milliken and John Stonestreet Our Standards: The Thomson Reuters Trust Principles.
title: “Last Orders Uk Pubs Brace For Mass Closures As Energy Costs Soar Klmat” ShowToc: true date: “2022-11-13” author: “Robert Carlson”
Pubs hit by the pandemic are facing a huge challenge on their energy bills There is no price ceiling for the increase in business energy prices The UK’s new prime minister is under immediate pressure to act
LONDON, Sept 1 (Reuters) – Like thousands of pubs across Britain, the Red Lion and Sun fears financial ruin this winter as its energy costs rise, just as business was beginning to recover from years of the COVID pandemic -19. Nestled in a leafy north London suburb, the pub’s annual energy bill will more than quadruple this year to 65,000 pounds ($76,000) from 16,000 pounds, said James Cuthbertson, director of The Frisco Group, which runs the pub along with two others in the capital. and south-east England. “We need to have an extra £50,000 in profits every year at the same time as profits are stagnating as consumers see their own prices rise at home,” he said. Sign up now for FREE unlimited access to Reuters.comSign up The dilemma of the Red Lion and the Sun is typical. Figures from energy analysts Cornwall Insight show that UK small businesses negotiating new energy contracts for the winter are facing an average four- or five-fold increase in prices compared to deals made two years ago. Over the same period, UK wholesale gas prices have risen 14 times, including doubling since Russia invaded Ukraine in February. For Cuthbertson and others in his position, the choice is between raising prices, cutting staff, reducing hours or closing entirely. More than 400 British pubs closed last year due to the pandemic lockdown, according to a UK property analytics firm, and that number could rise. “It is extremely difficult to see how good local community pubs will find their way,” said Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA). Almost two-thirds of UK hospitality businesses are currently in the red, according to research by the BBPA, the British Inn Institute and UK Hospitality.
LUNCH PUB WITH WATER
Cuthbertson said the Red Lion and Sun had cut back on lighting and he could not rule out closing for the winter. Keris de Villiers, who owns three pubs in south London, said increasing prices, even by 20p a pint, would really affect her patrons. “Many … are elderly and struggling to afford to heat their homes,” he said. Rising consumer price inflation – which hit a 40-year high of 10.1% in July and is set to rise further – will also limit the amount of money Britons have to spend to go out. As well as correspondingly higher costs for key inputs to the brewing process, such as hops and carbon dioxide, pubs – like much of the UK industry – are also facing rising staff costs. The Bank of England predicts that the UK economy will slip into recession later this year and remain there throughout 2023. “Trips to the pub will be few and far between in the coming months,” predicted Hargreaves Lansdown analyst Susannah Streeter. Drinkers at the Red Lion and Sun were already down, Cuthbertson said. “I’ve seen three of our regulars in one day choose tap water to go with their lunch,” he said. “I’d only seen it maybe once a month before that.” Further up the food chain, major listed pub owners including Mitchells & Butlers ( MAB.L ) and JD Wetherspoon ( JDW.L ) reported slower sales growth and possible losses this year due to rising costs. read more When British pubs and bars closed completely during the COVID-19 pandemic, the state stepped in with emergency funds. Today, any such intervention remains uncertain, as the government has said no new policies will be decided before a new prime minister is announced on September 5. “I’m lying in bed at night worrying how the hell I’m going to stay afloat,” Cuthbertson said. ($1 = 0.8599 pounds) Sign up now for FREE unlimited access to Reuters.comSign up Additional reporting by Yadarisa Shabong in Bengaluru. edited by David Milliken and John Stonestreet Our Standards: The Thomson Reuters Trust Principles.
