Industry trade bodies, Hospitality Ulster, BBPA, UKHospitality and the BII, have jointly written to the Secretary of State for BEIS, the Rt Hon Grant Shapps MP, calling for further support for vulnerable pubs, brewers and hospitality operators, facing devastating energy costs which are crippling their businesses.
With over 1600 hospitality businesses already having failed in the last three months (CGA and AlixPartners research), the organisations issued a stark warning about the thousands more potential business failures in the sector without further support.
In addition, results from a recent joint survey of BII, UKH, BBPA and Hospitality Ulster members, revealed the ongoing fragility of pub businesses, with one in three at risk of failure in the next 12 months, 16% of members having no cash reserves and a further 23% with fewer than three months reserves left. The issue is simply crippling the entirety of hospitality, from pubs at the heart of their communities through to city centre restaurant chains.
With the Energy Bill Relief Scheme (EBRS) closing at the end of March, operators will be left with little to no support from its replacement, the Energy Bill Discount Scheme (EBDS), leaving them facing bills of at least three and a half times that of the equivalent period in 2022.
The letter follows a call from the BBPA in January for an urgent inquiry looking at poor conduct by energy suppliers to be held, as well as UKHospitality’s Chief Executive Kate Nicholls giving evidence to the BEIS Select Committee earlier this week on the impact of the energy crisis on the sector.
In a joint statement, the organisations commented:
“Hospitality businesses have faced countless challenges over the last three years, being the first to close and the last to open in the pandemic, battling against soaring inflation in every area of their business, and more recently, huge disruption caused by industrial action.
“Government has previously intervened to support our sector, recognising the tangible social value we provide, but if they fail to act at this crucial time, these essential businesses providing so much in our communities, villages, towns and cities will be lost forever.
“Spiralling energy costs and having to commit to long-term contracts at eye-watering rates, now represents the single biggest threat to their survival. 50% of respondents to the joint survey have had to renew their energy contracts in the last six months of 2022, at a time of when prices were unfairly high in a non-competitive market.
“We are calling on the Secretary of State for BEIS to recognise the impossible situation facing our nation’s pubs, bars, restaurants, brewers and all those venues in hospitality, all of whom support communities across the whole of the UK. Government must ensure suppliers deliver a framework of fair and reasonable energy costs for hospitality businesses, and direct energy companies to allow those who were forced into contracts in 2022 at untenable rates to renegotiate, reflecting the now much lower wholesale prices, but also the record-breaking profits these suppliers have announced.
“Formally recognising our sector as an energy intensive and vulnerable area of the economy, as it has been throughout the pandemic and beyond, would also allow them access to the enhanced support under the EBDS.
“Without this, thousands of otherwise viable businesses at the heart of their communities will be lost, along with local, flexible, skilled employment. The growth that Government needs can and will come from our sector, but without the support on energy bills the results will be catastrophic.”
Notes for editors
- UKHospitality is the authoritative voice for over 750 companies operating around 100,000 venues in a sector that employed 3.2 million people prior to COVID.
- The body speaks on behalf of a wide range of leisure and ‘out-of-home’ businesses, from FTSE 100 enterprises to niche groups and independent single-site operators, as well as 6,000 affiliated operators.
- For the first time, the sector has a single voice bringing together businesses from all aspects of hospitality: coffee shops, hotels, serviced apartments, pubs, restaurants, leisure parks, nightclubs, contract caterers, entertainment, wedding venues, holiday homes, bowling alleys and visitor attractions
- Engaging with government, the media and the public, UKHospitality works to develop a robust case on how to unlock the industry’s full potential as the biggest engine for growth in the economy and ensure that the industry’s needs are effectively represented
- The sector creates £130bn in economic activity and generates £39bn of tax for the Exchequer, funding vital services
- Hospitality represents 10% of UK employment, 6% of businesses and 5% of GDP
- Hospitality is the 3rd largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined
For more information or to request an interview, contact UKHospitality’s Communications Manager Sam Ette on 07598 402163 or firstname.lastname@example.org.
About the British Beer & Pub Association
The BBPA represents UK companies which between them brew over 90% of the beer sold in the UK and own 20,000 pubs.
Our members include international companies, national and local brewers and pub businesses operating managed and tenanted pubs in cities, towns and villages across the country.
These businesses are at the heart of communities and local economies and include family businesses who have been brewing beer and running pubs for hundreds of years alongside emerging brewers and pub operators.
- The UK’s beer and pub industry supports close to 940,000 jobs
- The industry adds £26.2billion to the UK’s economy each year
For more information or to arrange an interview contact Jessie Powell on email@example.com.
About Hospitality Ulster:
Hospitality Ulster is the trade body representing the hospitality industry across Northern Ireland. Sustaining 72,000 jobs and with a turnover more than £2bn, the hospitality industry is Northern Ireland’s fourth largest employer and the backbone of the tourism industry. Hospitality Ulster speaks on behalf of pubs, restaurants, coffee shops, hotels and businesses with a substantial hospitality offer within their core business.
For further information, please contact: firstname.lastname@example.org
About the British Institute of Innkeeping:
The BII is the leading independent licensee support organisation for individuals working in hospitality, with 10,000 individual members running premises across the UK – predominantly tenanted, leased, managed and freehold pubs. The organisation provides expert helplines, online business support, and guidance on key industry issues, and savings on a range of supply deals for its members, keeping pubs thriving in the heart of every community.
Press release from the BII.
For further information please contact:
Head of Communications
Sentinel House, Ancells Business Park, Harvest Crescent, Fleet, GU51 2UZ
Mob: 07539 377752