Pubs Facing Their Toughest Challenges This Autumn

The hospitality sector is feeling the strain as pubs are directly in the line of fire, with some businesses seeing potential increases in energy bills of 300% or more. With seemingly insurmountable challenges, representatives from the hospitality sector have written to the Chancellor asking for government intervention.

The letter, signed by Greene King, JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan, the Society of Independent Brewers and the Campaign for Real Ale, states that without immediate action, up to 70% of members may not survive the winter. This is one of the most challenging times for the brewing sector and urgent action is needed to ease business energy prices and help preserve this important part of British culture.

Pub Sector is Under Immense Pressure

The pub sector is under immense pressure as a result of rising energy costs. Pubs are a vital part of the British economy, providing jobs for 940,000 people. However, they are struggling to stay afloat as energy bills continue to rise. Many pubs have seen their utility costs double or triple in recent years, and they are struggling to keep up with the rising prices.

The pub sector is calling on the government to take action to help reduce the burden of energy costs. They would like the government to reduce VAT and business rates, cap energy prices for small businesses and provide grants for renewable energy technology to help lower their energy use. The pub sector is a vital part of the British economy, and it is important that the government takes action to protect jobs and businesses.

Nick Mackenzie, Greene King CEO, 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.

“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 businesses as well as households.”

fixed-rate contract

A fixed-rate contract for business energy suppliers can help companies save money on their energy costs. By locking in a rate for a specific period of time, businesses can budget for their energy use and avoid the unexpected price hikes that can come with an uncapped rate. However, finding a suitable fixed-rate contract can be a challenge, as many energy companies are choosing not to renew their existing contracts or offer new ones to new customers.

This leaves businesses with few options and the potential for large increases in their energy costs. Energy brokers can be a valuable resource for businesses in this situation, as they have the knowledge and experience to connect businesses with the right suppliers and negotiate the best possible prices. With the help of an energy broker, businesses can find a fixed-rate contract that meets their needs and helps them save money on their energy costs.

The energy sector is currently facing some significant challenges. The Ukraine conflict has led to volatility in the wholesale energy markets, making it difficult for suppliers to price long-term contracts with confidence. This, in turn, has led to some energy companies increasing their prices by as much as six times.

Additionally, the energy companies themselves are struggling to secure credit insurance in case their customers close down. Some suppliers are hedging this risk by asking for upfront bond payments from their existing customers. These challenges illustrate the difficulties that the energy sector is currently facing.

As any business owner knows, there is always some natural fluctuation in income and expenses from year to year. But since 2020, the challenges faced by businesses have been unprecedented. First, there was the Covid-19 pandemic and the resulting lockdowns, which led to a sharp decline in revenue for many businesses.

Then, in 2021, energy bills started to rise sharply, putting an additional strain on businesses’ finances. And now, in 2022, pub owners are facing the prospect of their customers cutting back on pub visits to save money on their own expenses. The only thing we know for certain is that it’s still possible to get good advice and take action to reduce the impact of these challenges.

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