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B&K boss wants tax benefits for shareholders to kick-start investment

By Georgia Cronin, MCA

- Last updated on GMT

Looking ahead: B&K’s Kris Gumbrell has urged the Government to provide different solutions to help businesses after the lockdown
Looking ahead: B&K’s Kris Gumbrell has urged the Government to provide different solutions to help businesses after the lockdown

Related tags: Coronavirus

The hospitality industry needs to see more innovative solutions from the Government, as opposed to just bailouts and loans, if it is to survive and move forward post-lockdown, according to Brewhouse & Kitchen CEO Kris Gumbrell.

Acknowledging the necessity and value of the Coronavirus Business Interruption Loan Scheme (CBILS) and other measures intended to provide immediate relief, Gumbrell told The Morning Advertiser​’s sister title MCA​ that an initiative was needed to inject fresh, debt-free capital into the sector.

One way this could be achieved, he suggested, is for Government to provide tax reliefs, similar to those offered through the Enterprise Investment Scheme (EIS), to incentivise potential investors to invest in the industry.

“We were originally funded on EIS funding and I’ve written to the British EIS Association about this already,” he said.

“Instead of just throwing cash at us, the Government would be better placed to give some really good tax benefits to our existing and new shareholders to come back in, and they’d essentially be able to bail out companies on behalf of the Government, using their own capital.”

For this proposal to work, Gumbrell explained several restrictions specified in the current EIS model, which prevent larger businesses from applying for the scheme, will need to be re-formulated or removed.

Good opportunity

Gumbrell added: “A lot of the rules in the scheme are governed by Europe – and we’re leaving anyway.

“We need to call on the Government to be bold and innovative, to relax some of those rules and give investors some incentive so we can get capital moving again.”

Should a scheme such as this get approved, he added, it would allow larger operators with stable balance sheets, like Brewhouse & Kitchen, to acquire more sites, create jobs and, subsequently, bring in more capital to the wider economy.

“There’s a really good opportunity,” he said. “We want to be part of a sector that’s ready to go forward, not one that comes up gasping for breath.”

Whether or not his EIS-based proposal is approved by the Treasury, to ensure businesses are in the best possible position to navigate reopening in a wholly unprecedented time for hospitality, Gumbrell said engaging with staff throughout the lockdown period will prove vital for every surviving operator.

With 98% of its staff furloughed, Brewhouse & Kitchen has implemented a number of employee engagement and support initiatives, and is also using the closure as an opportunity to drive its training and apprenticeship programmes.

The group has assigned one of its team members in a part-time role to oversee morale across the business. It has distributed support packages to all its employees covering mental welfare, volunteering and learning opportunities, personal safety and finance, and it is also working with its apprenticeship partners to make relevant sections of online training readily available.

Industry casualties

Gumbrell said: “It’s been a good result the furlough scheme has allowed us to require people to train.

“We’re driving very hard with our apprenticeships at the moment. There’s a craft apprenticeship, a two-level chef apprenticeship as well as others on leadership and brewing, so we’re trying to push on with that.

“It’s so important that we don’t let our teams sit still. If we keep them together and keep them motivated, we could ride this really well.”

Although there will be unavoidable industry casualties caused by the pandemic, he added operators should take some comfort in the fact “our sector is a resilient sector, made of up resilient people”.

He continued: “While we’ve never seen anything quite like this, we’ve been through a number of recessions. We’ve been through the Beer Orders of 1989, we’ve faced so many challenges but pubs always survive.

“The hospitality industry is full of job creators, innovators and regenerators. We thrive on human spirit and building goodwill.

“Eventually, pubs will be full again. Consumers may be nervous initially but they’ll come, and when they do, they’ll remember who the good guys were.”

Brewhouse & Kitchen closed all of 24 sites on 18 March, two days before the enforced closure was implemented.

This week, the group announced it will be reopening two Dorset pubs – in Dorchester and Southbourne – to trial a beer takeaway service, before potentially rolling out the initiative across its estate.

Related topics: Other operators, UnitedWeStand

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