Pubs face extra £800m in energy bills with bosses bracing for cocktail of hiked costs this spring
Pubs have reported £800m in additional energy bills, with hospitality bosses warning suppliers are refusing to ink new contracts with venues.
Firms have reported energy bills ballooning 150 per cent compared to pre-pandemic energy bills, with an average above 100 per cent.
The British Beer and Pub Association (BBPA) said its members had reported that energy providers had refused to take on new accounts or renew contracts.
The BBPA’s chief Emma McClarkin called on the energy regulator, providers, and the government to “take a more pragmatic approach with regards to the provision of energy to the hospitality sector.”
McClarkin added: “The pub and brewing sector is at a pivotal point in its recovery and the erosion of margins is impossible to sustain.”
Pub bosses are also anticipating an increase to employer National Insurance contributions this spring and a rise in the VAT rate.
A spokesperson for Energy UK said it was working with the government to “see what can be done to support business customers.”
They continued: “As has been well publicised, suppliers have been facing record wholesale costs over the past year with gas prices increasing by around 500 per cent from the start of 2021.
“Suppliers have to be able to recoup these costs which unfortunately but inevitably means higher prices and they have to take a commercial decision on whether it is viable to take on a particular business customer.
“In the domestic market, we have seen nearly 30 suppliers go out of business since the start of August because the current price cap didn’t allow them to cover their costs – although the domestic price cap will rise by nearly £700 next month, which again shows the scale of increases forced by the current market situation.
“We realise it’s a very difficult time for business customers – as well as domestic customers – right now with higher prices a reality for the foreseeable future.”
Earlier this year, CityA.M. reported that pubs were facing inflationary business costs of more than 10 per cent with bosses battling spiralling energy and labour costs.
More than two in three pubs told an industry survey they were facing such substantial cost increases.
Venues are facing skyrocketing energy bills while a labour crunch has seen wages of bartenders and chefs leap in the wake of the pandemic and Brexit.
In a survey of the British Institute of Innkeeping’s members, more than one in three publicans said they currently have no cash reserves in their businesses.
Three quarters of respondents said their overall revenues were more than 20 per cent down in 2021 vs 2019. Half of the publicans surveyed said revenue was down more than 40 per cent.