Industry trade bodies Hospitality Ulster, the BBPA, UKHospitality and the BII, have jointly written to the Secretary of State for Business, Grant Shapps, calling for further support for vulnerable brewers and hospitality operators, facing devastating energy costs which are crippling their businesses.

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With more than 1,600 hospitality businesses already having failed in the last three months, according to research by CGA and AlixPartners), the organisations have issued a stark warning about the thousands more potential business failures in the sector.

Results from a recent joint survey of BII, UKHospitality, BBPA, and Hospitality Ulster members, revealed the ongoing fragility of pub businesses. One in three are at risk of failure in the next 12 months, 16% of members have no cash reserves, and a further 23% fewer than three months of reserves left.

With the Energy Bill Relief Scheme closing at the end of March, operators will be left with little to no support from its replacement, the Energy Bill Discount Scheme (EBDS). This will leave 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. UKHospitality’s chief executive, Kate Nicholls, has als given evidence to the BEIS Select Committee last week on the impact of the energy crisis on the sector.

“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,” said the organisations in a joint statement.

“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. Fifty per cent 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.”

The statement continues: “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.”

In a separate statement, the Campaign for Real Ale called on the prime minister and chancellor to put together a support package to save the UK’s pubs, after figures showed that 21 pubs a week are closing or losing their licensees. 

Pub closure statistics revealed by the consumer organisation for the period July to December 2022 show that 554 pubs in Britain are now classed as long-term closures, meaning they have gone out of business or are standing empty. 

Beer drinkers and pub-goers are being asked to contact their MP to ask them to support action to save pubs in the government’s spring Budget.

“These figures should be an urgent wake-up call for the government,” said CAMRA chair Nik Antona. “Without a support package in the spring Budget, we risk losing more pubs, which are at the heart of community life and play such a crucial role in bringing people together and tackling loneliness and social isolation. 

“With the cost of doing business rocketing, energy costs sky high, and customers tightening their belts, it is little wonder that hundreds of pubs across the country are closing for business or are standing empty. We know that the licensed trade can thrive and drive growth in the economy, but only if the government acts quickly.  

“That’s why CAMRA is calling on all pub-goers to join our campaign for urgent help to save our pubs, which includes giving more help with energy bills from April, making the business rates system fairer for pubs, and cutting tax on draught beer and cider by 20%, to give our locals a fighting chance to compete with the likes of supermarket alcohol.”