Failure rate highest among freehouses, figures show

More freetrade houses have failed than either tied or managed pubs, according to figures from the UK Statistics Authority.

In response to a Parliamentary question on pub closures, Cabinet Office Minister Angela Smith obtained the figures that show the number of pubs that have stopped trading in recent years.

The stats show that the rate among freehouses is running at around one in every 3.5 compared to one in 13 tied businesses and one in 26 managed houses.

The figures show that in 2007, 5,260 independent pubs and bars were wound-up, down from 5,300 in 2006.

In 2007, 2,340 tenanted houses stopped trading compared to 2,310 the year before.

The figures for managed houses were 350 for 2007 and 345 for 2006.

The statistics do not include pubs that have been closed for reasons other than going bankrupt, but they do account for churn and pubs that may have failed more than once in a year.

Mark Hastings, British Beer & Pub Association (BBPA) director of communications, said the fIgures account for churn and pubs that may have failed more than once in a year.

"Government will be very interested in these numbers and what they indicate is happening in the pub sector," he said.

"The biggest economic shock since the Great Depression is hurting every business and every sector and hitting all pubs hard. These official statistics show a greater level of sustainability amongst tied pubs."

However anti-tie campaign group Fair Pint's Karl Harrison said the statistics do not only relate solely to businesses that have gone bankrupt but are drawn from information about the de-registration of VAT and PAYE schemes or where VAT turnover is registered as zero.

This includes businesses that have been sold on or restructured and have deregistered VAT and PAYE schemes.

Harrison said the peak figures of 'failed pubs' comes in the boom years of 2003-2005 when the turnover of pub sales and assignments was at its height.

He said: "The BBPA is clutching at straws here, they know full well that the statistics do not support their claims about closures. SIC codes have been recently revised and all pubs and bars are now included together. The previous codes did not provide the breakdown claimed by the BBPA in any event. They want to try to hide churn in 'pubco' estates but this sort of spin looks as sad as the Mr Pinty campaign earlier this year."

He added that the breakdown of the sector of pubs is also confused with some pubco operated houses appeared in the independent table.

Overall in 2007 there were 7,950 failed pub businesses, down from 10,800 in 2004.