A new report produced for the British Beer and Pub Association (BBPA) has said pubs and breweries will face major losses and closures if the government’s energy bill relief scheme is not extended beyond March 31.
The report, by Frontier Economics, found that energy bills returning to their regular rate post-March would put pubs and brewers at a loss of 20% on average. The report showed energy costs were currently the biggest threat to their viability, and would be “even more lethal” when the relief scheme ended in April. This was on top of cost inflation across other parts of their businesses.
Tim Black, associate director in Frontier Economics’ retail and consumer team said: “Recent economic shocks of Covid, Brexit and the war in Ukraine have put sustained pressure on businesses. Our analysis shows the pub and brewery sector is facing a combination of surging costs – primarily energy, but also raw materials and wages – and falling demand, as consumers reduce their spending in the face of severe cost of living pressures. While there are different impacts across businesses and uncertainty on the outlook, the underlying economics of the sector makes absorbing these shocks incredibly difficult – and some firms will struggle to survive.”
Emma McClarkin, chief executive of the BBPA said the organisation is urging the government to seriously consider the impact of rising energy costs. “These figures paint a stark, very grim picture of what is to come if our sector does not make the cut for extra support come April 1.”