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Yahoo
12 hours ago
- Business
- Yahoo
How £7 pints are destroying Britain's pubs
Brian Whiting can still remember the first time he had to charge more than £5 for a pint of Guinness in one of his pubs. 'There was a regular who would come in most days and read the paper,' he says. 'The day I put it up to £5, he turned around, walked out and never came back.' The reaction of his former customer just goes to show the depth of feeling about the price of a pint in Britain. However, for publicans, incidents like this are becoming increasingly common. What was once an easy-to-afford commodity has, for many households, become too expensive. Pub owners have been forced to repeatedly raise their prices in recent years after sharp increases in the cost of everything from beer itself to food, fuel and labour. Many fear this has thrust them into a doom-loop, where they must keep raising prices to stay afloat despite the risk of driving away cash-strapped customers. 'It's becoming very toxic,' says Whiting, who runs a string of pubs across the South East. 'You're so frightened, you've got to put prices up ... but you've got no choice but to do it. 'I worry that people think that landlords and publicans are just creaming it and making money. We work on tiny margins and we're trying to survive ... No one wants to charge those prices. 'I'm not sitting on a yacht anywhere.' According to the British Beer and Pub Association (BBPA), the average price of a pint across the UK rose above £5 for the first time this year. But for pub owners like Whiting, that figure seems strikingly low compared with what they actually have to charge. The days when he could sell a pint for £5 and turn a profit are now a distant memory. 'You'll get a 'cooking lager' for mid-£6, but anything premium now is going over £7 for us,' he says. James Ratcliffe, co-owner of The Black Bull in Sedbergh, Cumbria, agrees: 'Premium lager? We're at about £6.70 a pint now. 'When we first opened [in 2018], we had a pint on sale that was £4.95 ... We were worried about going over the £5 mark. 'The dilemma is that, yes, I can put [the price] up, and yes, people understand why it's going up, but there's a certain point where people say, 'I'm not going to pay it.'' Some large brewers have also been criticised for asking pubs to pay more. Diageo, the parent company of Guinness, was accused of unfairly imposing price rises on the hospitality industry earlier this year. Whiting warns the pint price doom-loop is pushing customers out of pubs and into the supermarkets, where alcohol is significantly cheaper. 'It's not made life easy with supermarkets being able to sell booze so cheap,' he says. Even though pint prices are typically much higher in London, the situation is worse outside the capital and other cities, Whiting believes. 'A lot of people go into a pub in a city and don't even know what they're paying,' he says. 'They tap with their card and off they go. In a village, everybody wants to know how much the cost of a pint is.' It comes amid a deepening crisis in Britain's pub industry. Nearly 300 pubs shut down across England and Wales in 2024 – the equivalent of six per week – according to the BBPA. Nic Sharpe, director of the St John's Tavern in Archway, north London, highlights the barrage of costs facing landlords. 'My energy costs went up by £40,000 last year,' he says. 'Across the board, my wages are £25,000 more. The business rates have just gone up. 'It's like, f------ hell, I'm up on revenue from last year, but it's wiped out by the amount of costs.' Sharpe's prices are approaching the £7 mark too. He currently sells a pint of Estrella Galicia lager for £6.50, which is cheaper than rival venues where he says he has been charged as much as £7.80 for the same brand. Higher taxes have compounded problems. Wage bills have become a particular worry in recent months after Rachel Reeves increased employer National Insurance rates. The changes, announced in her October Budget, took effect in April and have hit the hospitality sector hard. According to a survey by the major hospitality trade bodies, one third of firms in the sector are now operating at a loss. The Telegraph also recently revealed that some pubs have even had to start calling last orders as early as 9pm to save money on staff costs. 'We're living with [higher NI costs] now and we're passing it on, and we're having these conversations and I hate it,' says Whiting. 'The last thing I want to do is increase my beer price, I want my pub to be full of people.' Ultimately, Sharpe believes swathes of smaller businesses will simply go bust. However, as many search for a stay of execution, one thing is certain – further price rises for punters. 'We're knocking on the door of the £10 pint,' says Whiting. 'It's inevitable.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
4 days ago
- Business
- Yahoo
Britain's pubs are being ‘taxed out of existence'. Can Clarkson's Farm help?
Jeremy Clarkson seems determined to find an answer to that age-old question: how do you make a small fortune? After he first tried by starting with a large fortune and buying a farm, he then turned his attention to running a pub, that other once-great British totem that has fallen on hard times. Perhaps an airline or football club is next. In the latest series of Clarkson's Farm, which chronicles the petrol-head's life as he brings his Top Gear sensibility to the Oxfordshire countryside, we see him attempt to transform a knackered old boozer off the A40 into a thriving pub that serves the produce of local farms. On the hunt for his ideal site, as chronicled on Prime Video, Clarkson sees a staggering number of pubs that are either up for sale or have been left empty by owners unable to make ends meet. Things do not get off to a great start: one has so many health-and-safety signs which assault his senses as he crosses the threshold that he immediately feels unwelcome. 'What's stark about his search for his pub is just how many pubs are vacant or available,' says Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA) who lives near the presenter in the Cotswolds. 'As Clarkson says, 'What would a village be without its village pub? It would just be a collection of houses.'' After deciding to buy The Windmill in the market town of Burford – which he has since opened and renamed The Farmer's Dog – last July, Clarkson solicits advice from his celebrity friends about what challenges await him as he tries to turn his 'farm-to-fork' idea from a dream into reality. We see Piers Morgan – whom he once thumped on Concorde – warn him that punters will almost certainly try to steal things, from cutlery and salt shakers to the art off the walls. James Blunt says he will have to worry about drink-drivers and struggles hiring staff. Clarkson's erstwhile Top Gear chum, James May, droned on about how expensive everything was, especially accountancy fees, insurance premiums and employee wages. But it was film director Guy Ritchie who put it in the starkest terms, when he warned that sometimes 'it looks like you're making £50k a week but it transpires you're losing £10k a week'. No wonder, then, that the number of British pubs is collapsing. There were more than 60,000 pubs in Britain at the turn of the millennium, but today that number has fallen by a quarter to 45,000, according to the BBPA. Publicans have had to put up with steeper taxes, the pandemic lockdowns, surging energy prices and, most recently, Rachel Reeves's hike in National Insurance contributions on employers, which has pushed up staff costs. The BBPA estimates that £1 in every £3 taken at the bar goes straight to the taxman: of the surviving pubs and bars, one-third are operating at a loss as a result of being so heavily taxed, the UK Hospitality trade group reckons. So it is perhaps no surprise that Clarkson found so many pubs available to buy when he started looking. 'There are always, sadly, businesses that fail: you will always get closures in any given year. Normally you would expect them to be brought back to life. The cost pressures that the Chancellor has imposed make that impossible,' says Kate Nicholls, UK Hospitality's chief executive. 'What Clarkson's demonstrating is this is the most highly taxed, highly regulated sector of the economy, and we're taxing too many businesses out of existence altogether.' Pubs can be a money sink, meaning that any aspiring pint-pullers do need some serious cash to get things going in the first place. Clarkson, for instance, was told by his surveyor before buying the pub that he would need to spend £150,000 to repair the roof and £100,000 to upgrade the lavatories. In typical fashion, he ignores all of this advice – saying that such surveys were an exercise in 'a--e-covering' – and sets about trying to do up his pub at six weeks' notice with a budget of no more than £25,000. And yet, as has become routine in his series, it turns out to be much more complicated than that. For instance, having assumed that his kitchen was good to go, he was told that he might have to spend as much as £100,000 upgrading the kit – including a £7,000 oven – which could be cut to about £40,000 if he bought refurbished goods. Rachel Hawkins, a consultant Clarkson employs to help him get his pub up and running, tells him that managing a hostelry is more complicated than it looks. 'You see a smiley waitress pulling a pint. That is about 1 per cent of it.' The fact that Clarkson struggles so much underlines how precarious the wider industry is. 'What the programme highlights very well is that if you've got a lot of money and you've got that name, then you can probably try to make a go of it; you can take one of these sites and turn it around, but it's going to need a lot of investment behind it,' says Nicholls. 'Even then, it's still difficult to make a profit and do the altruistic thing of supporting local farmers.' Clarkson's Farm has been lauded for putting the struggles regular farmers face firmly on the agenda. Tim Martin, the founder of Wetherspoons, who is probably Britain's most successful publican, tells me that he hopes what Clarkson has done for farmers could be replicated with the nation's pub landlords – especially when it comes to getting the Government's attention. 'The fact that Clarkson has been frank about the great complexity and costs involved in running a pub is a huge benefit for the industry,' he says. 'Ministers tend to regard pubs as a milch cow that can endure further taxes or regulations ad infinitum. However, thanks to Clarkson's report from the front line, the plight of pubs is becoming clear.' Kris Gumbrell, the founder of Brewhouse & Kitchen, a chain of 21 bars with 500 staff, says that he has been 'addicted' to watching Clarkson's show and reading his stories about running the pub. And he admits that he has raised a 'wry smile' when he hears about issues Clarkson has had – such as sky-high energy bills – that he has also experienced. 'I'm watching it, and a lot of the challenges he's [had] resonate with people in the sector. The good thing is, he's drawing attention to problems that a lot of publicans have, a lot of people in the pub industry are encountering every day and have been for some time,' Gumbrell says. 'It's a great industry and I'm pleased that Jeremy Clarkson has jumped into it, but I've seen his woes and we've all been there.' Having the reality of running a pub depicted in such a popular series – with a figure as famous as Clarkson behind the bar – will also educate punters about how hard the graft can be. 'From a guest point of view, opening up the workings of a pub and to understand what really goes on behind the scenes – the pressures and the challenges we have every day – are good for the guests to understand,' Gumbrell says. 'Everybody knows how to run a pub until they get one. Everybody's got an opinion about how a pub should be run, but it's very different when you're actually at the coal face with your hand in your pocket or writing those cheques. He's very good at exposing the realities.' Though there are so many challenges that publicans face – with pubs closing down every week – those remaining in the industry are a resilient bunch and have a habit of trying to accentuate the positives. 'Despite everything, Clarkson still opened his pub. He still wants to have that, he still wants to serve the community,' says the BBPA's McClarkin. 'There is something in it that makes it worthwhile. People still do want to go to the pub. There is still demand there.' She adds: 'We need to lean in and get behind them. I really hope the programme – just as it did for farming – begins to open everybody's eyes about how you run a pub, how difficult it is and what support we need.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
ITV News
28-05-2025
- Business
- ITV News
Northamptonshire drinks manufacturer says pubs are at breaking point as industry calls for change
An alcoholic drinks manufacturer has called on the government to take urgent action to stop British pubs from closing during a "perfect storm" of financial turmoil. Philip Saxby of Saxby Cider in Irchester, Northamptonshire, said he wants to see "meaningful tax breaks" for pub landlords. According to the British Beer and Pub Association, the industry employs over 1 million people - but six pubs in England and Wales closed for good every week in 2024. Mr Saxby told ITV News Anglia: "Prices are going up, pubs are therefore having to put their prices up more, people are not going out so much, the amount of pubs is shrinking all the time. "So we're basically at a place where our prices are higher, and our customer base is getting smaller - that's not a good situation for anybody.' Joanne Ellis, landlady at The Red Lion in Bozeat, Northamptonshire, has felt the strain ever since the increase in employer's National Insurance contributions. She said: "I think the pressure is relentless, you have to keep on top of everything." She is now working more hours in the kitchen and behind the bar because she can't afford to pay her staff. Ms Ellis added she is having to get creative to get more people through the door on top of the bingo and quizzes she already runs, adding: "I'm going to have to do more events, we'll have to put on more bands which is costly again. "I'm thinking of doing fancy dress parties. If things like that weren't happening, I think people would just stay at home, it is easier isn't it, to just stay at home." The BBPA has called on the government to mitigate employment cost rises and modernise the business rates system.
Yahoo
26-05-2025
- Business
- Yahoo
‘Recycling tax threatens to drive us out of business', warn pubs and restaurants
Sir Keir Starmer has been urged to delay the introduction of a controversial eco levy amid fears that the tax raid will push struggling pubs, hotels and restaurants out of business. In a letter to the Prime Minister, hospitality companies warned that pushing ahead with an expanded levy on packaging will fail to boost recycling rates while fuelling price inflation and damaging the economy. They accused Steve Reed, the Environment Secretary, of seeking to ram through the reforms 'far too quickly' and failing to pay 'due regard' to the damage it would cause to businesses that are already battling a tax raid by Rachel Reeves, the Chancellor. The letter was signed by eight groups including UKHospitality, the British Beer and Pub Association, the Campaign for Real Ale, and British Glass. Many hospitality venues say they are already on the brink following Ms Reeves's decision to increase employer National Insurance contributions, raise the minimum wage and cut business rates relief in April, which will cost the industry an estimated £3.4bn this year. But under the so-called extended producer responsibility (EPR) levy, they are now threatened with a 'triple whammy' of costs in October worth millions of pounds. This includes the direct impact of the levy itself, the costs they expect their suppliers to pass on, and what they already pay for commercial waste disposal, UKHospitality says. Kate Nicholls, chief executive of UKHospitality, warned: 'You already have a third of outlets operating at or below break-even. 'Resilience is weak and margins have been squeezed until they are wafer thin. Another unnecessary tax will push many over the edge. 'Jobs and businesses are at risk and prices will inevitably rise.' The EPR scheme will see food and drink companies charged a levy based on how many tonnes of packaging such as glass, aluminium and plastic goes into their products. It is meant to change the way recycling is paid for, by making businesses contribute more towards the disposal of household waste that is currently handled by local councils. In theory, that is meant to incentivise those businesses to reduce the amount of packaging they use overall. But hospitality firms say the added costs will simply be passed on to them by their suppliers, and to supermarket shoppers through higher food prices. Earlier this year, fast food chain Burger King and pub giants Fuller's, Marston's, Punch Pubs and Stonegate Group warned against the policy, claiming it would add £2,000 to the annual running costs of a typical large pub. The British Retail Consortium has also estimated that the levy will add £2bn to the retail sector's costs. In their letter to the Prime Minister and Chancellor, hospitality businesses said the policy was badly designed because it would effectively force them to 'pay twice' for recycling. Many already pay separately for waste disposal through commercial services. The Department for Environment Food and Rural Affairs (Defra), which Mr Reed leads, has pledged to consult on potential exemptions for 'non-household waste' but that process is not expected to begin until later this year. It raises the prospect that firms will have to pay higher levies in the meantime. Ms Nicholls warned that would be 'too late for too many firms'. On Sunday, a source close to Mr Reed insisted the Environment Secretary remained committed to the reforms and claimed he had the backing of Sir Keir and Ms Reeves. The reforms were repeatedly delayed under the previous government. Defra was approached for comment. The department has repeatedly insisted that the final costs of EPR remain uncertain and are likely to change compared to current estimates. It has claimed that the policy will help to reduce waste and boost recycling, and will stimulate £10bn of investment in domestic recycling, creating more than 20,000 jobs. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
South Wales Guardian
10-05-2025
- Business
- South Wales Guardian
Wetherspoon customers issued looming 20p pint price warning
According to the boss of the chain, breweries are already pushing through hikes on the back of cost pressures from the Budget. Martin said the government kept heaping pressure on pubs through higher taxes and costs. The pub industry had already faced demands for higher prices from breweries, which had increased their prices by around 7p per pint in the past week, he revealed. "It means pints in pubs are going to go up by on average 15p to 20p this month", he said. JD Wetherspoon has said that its pubs have capitalised on the spring sunshine while reiterating the impact of fresh hikes in labour costs on the bottom line. Business Insight 📈 ✍️ @ScottWWright @heraldscotland Article: The British Beer and Pub Association recently warned that the price of a pint is expected to exceed the £5 mark, up from the current average of £4.80. Breweries are reacting to increases in the National Living Wage and National Insurance contributions, which came into effect at the start of April. The National Living Wage rose by 77p an hour to £12.21, while the rate of employer National Insurance contributions increased from 13.8% to 15%. Plus, the threshold at which businesses begin paying this tax was reduced, dropping from £9,100 to £5,000 a year. Sir Tim warned: "The risk to the country is people either in the UK or coming from abroad will think that it's too expensive to set up a business in the UK." "Guinness is pretty expensive but we are selling plenty of the stuff. "We have also introduced Jaipur ale, which is more pricey but doing very well. "Our Stella also outsells Bud Light, which is cheaper." Recommended reading: The Wetherspoon boss confirmed he remains "very keen" on the idea of opening pubs overseas through the company's rapidly growing franchise business. The pub giant already operates a few franchised pubs on university campuses and seven pubs within Haven Holiday parks. He said: "It's a good sign the holiday parks are doing very well so we think it will do well with people overseas, especially where Brits holiday." Sir Tim added that he is "open to anything," including launching pubs in airports and campsites.
