New tier two and three rules ‘to cost wet-led pubs £1.5bn’

By Nikkie Thatcher

- Last updated on GMT

Aid needed: BBPA chief executive Emma McClarkin urged the Chancellor to provide pubs with further financial support
Aid needed: BBPA chief executive Emma McClarkin urged the Chancellor to provide pubs with further financial support

Related tags: Legislation, Wet-led pubs, British beer & pub association, Emma McClarkin

Wet-led pubs placed in the two highest tiers of the new restrictions once lockdown is eased will collectively lose £1.5bn in turnover, it has been estimated.

British Beer & Pub Association (BBPA) chief executive Emma McClarkin has written to Chancellor Rishi Sunak ahead of the Comprehensive Spending Review tomorrow (Wednesday 25 November), asking him to provide emergency grants to pubs in a bid to help the survive winter.

This would be in line with the funding available in the first lockdown as the trade body estimated a huge majority (90%) of pubs placed in tiers two and three would operate at a loss.

The BBPA’s proposed emergency grants would be based on rateable value. Pubs with a rateable value of less than £15,000 should be eligible for £3,000 a month.

Turnover impact

Those rated between £15,000 and £51,000 should be able to claim £6,000 a month. For venues with a rateable value of £51,000 and £100,000 should be eligible for a grant of £9,000 a month.

Grants worth £12,000 a month should be awarded to pubs with a rateable value more than £100,000.

The trade body stated the average loss of turnover for a wet-led pub under the new tier two restrictions and those closed under tier three restrictions would be £47,000 per pub – totalling £1.5bn.

Utterly heart-breaking

It also estimated compared to a typical December, 180m pints of beer will go unsold by wet-led pubs at a value of £680m to the sector and called on the Government to a rescue package of support for brewers, which “have suffered substantial losses throughout this year but have had no grant support at all”.

In the letter to the Chancellor, BBPA boss Emma McClarkin said: “I cannot overstate how serious the situation facing our brewers and pubs is at this stage.

“It would be utterly heart-breaking if, having survived through the past nine months, pubs now face ruin with the end of the pandemic in sight.”

The letter in full:

Dear Chancellor

Emergency funding for pubs and brewers

I am writing to you ahead of the Comprehensive Spending Review announcement to impress upon you the seriousness of the situation facing our nation’s pubs and brewers. I know you are more than aware of the crisis facing our sector, but the Winter Plan has only made the situation more urgent and heading into what would have been our most valuable trading period, thousands of pubs are now reaching the end of the road.

Following the announcement, it is clear pubs are being singled out for exceptionally strict treatment, despite a lack of available evidence that they are any more responsible for outbreaks than other types of venue. If anything, the evidence indicates that they are far less of a risk than many other environments. As a result of these exceptional restrictions we are calling on the Government to put in place a more sustainable round of grants for pubs in line with the first lockdown to adequately cover ongoing fixed costs, with payment as soon as possible. As a minimum:

• Pubs with a rateable value of less than £15k should be eligible for a grant of £3,000 per month

• Pubs with a rateable value of between £15 to £51k should be eligible for a grant of £6,000 per month

• Pubs with a rateable value of between £51k to £100K should be eligible for a grant of £9,000 per month

• Pubs with a rateable value of more than £100K should be eligible for a grant of £12,000 per month

To put this into context, the average loss in turnover for a wet-led pub located in a new tier two area in December and for those pubs closed entirely in tier three will be £47,000, with total lost turnover for these pubs amounting to £1.5bn. The situation facing pubs also inevitably has an enormous impact on brewers who are again losing their most valuable route to market. If all pubs were to be subject to the restrictions in tiers two or three in December, we estimate that compared to a typical

December, 180m pints of beer will go unsold by wet-led pubs alone at a value of £680m to the sector. It is vital that the Government also puts in place a rescue package for brewers who have suffered substantial losses throughout this year but have had no grant support at all.

This enhanced regime would make all the more urgent an increase in the state aid cap in line with the Commission’s new €3m limit – and potentially more once the UK is no longer subject to EU rules. It is also vital that pubs receive an early signal that the business rates holiday will be extended beyond March 2021, this will provide publicans and pub owners with a degree of certainty going into the year ahead.

I cannot overstate how serious the situation facing our brewers and pubs is at this stage. It would be utterly heart-breaking if, having survived through the last nine months, pubs now face ruin with the end of the pandemic in sight. I would welcome the opportunity to discuss this further with you and your officials at the earliest opportunity.

Yours sincerely,

Emma McClarkin

Related topics: Legislation

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