Sector demands reopening date from Gov as sales fell by half in 2020

By Nikkie Thatcher

- Last updated on GMT

Hospitality impact: beer sales in the on-trade plummeted over the course of 2020, with pubs only allowed to open for a fraction of the year
Hospitality impact: beer sales in the on-trade plummeted over the course of 2020, with pubs only allowed to open for a fraction of the year

Related tags British beer & pub association Legislation Government Greene king St austell Jw lees

Trade leaders and industry body the British Beer & Pub Association (BBPA) have pleaded for a clear date and plan for when and how pubs can reopen.

This comes as figures revealed restrictions and lockdowns meant beer sales in 2020 fell by more than half (56%) – down by £7.8bn.

The BBPA has highlighted five key points it wants the Government to consider when pubs are allowed to reopen.

Its Roadmap to Recovery​ highlighted after the most vulnerable groups have been vaccinated, pubs must reopen when non-essential retail and other parts of the hospitality sector reopen – something that has also been stated by trade voices such as Admiral Taverns boss Chris Jowsey​ and Greater Manchester night-time adviser and operator Sacha Lord.

Research from the BBPA found in Q2 of 2020, which included lockdown one, beer sales in the on-trade plummeted by 96%.

In Q4 last year, a time with trading restrictions were heavily imposed with tiers and a second lockdown, pub beer sales fell by 77% compared to 2019.

Despite Eat Out to Help Out being in place in Q3, as well as the temporary VAT cut on food and soft drinks, beer sales in pubs still dropped by 27%.

The measures outlined by the BBPA are:

  • Business rates holiday extension for the 2021/22 financial year
  • The reduced 5% VAT rate on soft drinks, food and accommodation to be extended for a further 12 months and expanded to cover alcoholic drinks with a review in the future in a bid to be a permanent reduction
  • Grants and employment support (namely the furlough scheme and Job Retention Bonus) to be continued if trading restrictions are still in place after April
  • A brewer compensation fund for stock write-offs due to the pandemic and resulting lockdowns
  • Positive and proactive communication to boost consumers returning to hospitality venues alongside consideration of further demand stimulus if confidence in the sector remains fragile

BBPA chairman Philip Whitehead said: “This is not sustainable for our sector. We cannot continue to hold out under these circumstances. We urge the Government to provide clarity to our sector on when it can expect to fully reopen.

“As a sector, we have invested hundreds of millions in ensuring we provide places for people to safely socialise in. When pubs reopening in July, we did so safely and successfully to world-leading standards.

“When pubs can reopen, the restrictions they face – ranging from the substantial meal rule to the 10pm curfew – must be removed. They simply destroy their ability to operate as viable businesses.

“After nearly a whole year under forced closure, or open but under severe restrictions, the pub trade has been decimated and sales of beer in pubs have plummeted by 56%."

Vital support

He went on to say how due to pubs' revenue falling off a cliff last year, operators are holding debt with little to no cash left.

Whitehead added: “We need the Government to continue to provide financial support for pubs when they reopen to bridge the gap to full recovery and commit to supporting the beer and pub sector for the long-term with duty, VAT and business rates reform.

“Pubs need the VAT cut and business rates holiday for hospitality to be extended immediately as well as a significant beer duty cut.

“These will provide vital support for pubs and stimulate demand and signal Britain and its pubs are safe and back open for business.”

Greene King CEO Nick Mackenzie said last year was a write-off for the sector and echoed calls for a reopening plan to be unveiled as soon as it is safe to do so, without “complex and unjustified restrictions, which make it unviable to reopen”.

He added: “We are grateful for the financial support the Government has given the sector so far and this has really helped protect jobs and stave off pub closures, but we urgently need confirmation on additional support, given the long-term restrictions that have been placed on our sector.

“Pubs are the heartbeat of their communities and can play a really important role as we emerge from this pandemic, creating significant numbers of jobs and reconnecting people to help tackle social isolation that has affected so many people over the past year.

“Without publicans having clarity on reopening and additional support, there is a real risk of more viable businesses closing their doors in the weeks and months ahead.”

The sector has worked collaboratively and tirelessly to support the war against Covid-19, St Austell chief executive Kevin Georgel highlighted.

He said: “We’ve closed our pubs invested millions in reopening safely and played a responsible role in balancing the public health and economic impact. Despite these efforts, hospitality continues to suffer more than any other industry.

“As one of the West Country’s biggest employers, we urge the Government to provide us with a definitive reopening date to enable us to plan for reopening safely.

“We also need immediate and long-term financial support, including an extension to the VAT cut and business rates holiday."

More than an economic contributor

Georgel added: “Finally, we must be able to reopen alongside other non-essential retail and without trading restrictions that made it impossible for pubs to trade viably when the tier system was in place – including the 10pm curfew and rules involving mixed households and substantial meals.

“The great British pub is part of our social fabric. It’s far more than just a huge economic contributor. The avoidable loss of these wonderful, historic, community assets will be felt by generations to come, if the Government don’t act now and provide clarity and further support.”

Hawthorn Community Pub Company boss Mark Davies pointed out the importance of the trade to their local areas.

“As the owner of so many community pubs around the UK, I cannot emphasise enough, how important it is the Government recognises the role pubs play in so many communities and that pubs are part of the fabric of our society," he said.

“It is therefore crucial immediate financial support is secured for the pub sector with business rates and VAT and urgent priority and we need a fair and viable roadmap to reopening in a safe and socially responsible way, as we did on 4 July last year when we came out of the first national lockdown.

“A failure to do so will inevitably lead to business failure, loss of jobs and a destruction of community value in so many locations around the UK.”

Comments on how the sector reopened in a Covid-secure way last summer were echoed by JW Lees managing director William Lees-Jones.

He said: “We know we can reopen safely with all the mitigation we have put in place. We estimate the current level of Government grants and furlough support have reduced our losses by 50% but, like many breweries, 99% of all JW Lees beer is sold in pubs and more than half through our own 150 pubs in the north west.

“We can only trade if pubs are open and pubs in our heartland in Greater Manchester have now been closed for 14 weeks – since 5 November – on top of the 15 weeks from 20 March.

“This is clearly not sustainable and we need to learn how to live with the virus as we reopen the country.”

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