Operator sees electricity quote soar by 250%
Cussens’ bills for his four pubs have been estimated to increase by 250% in the coming months as his fixed contract comes to an end, soaring from an average of £1,600 to over £5,000.
He said: “The price [we’ve been quoted] at the moment would push our annual bill for all four pubs up from £80,000 to £250,000 a year, just for electricity, which is a terrifying increase.
“We are trying to shop around, but when you speak to the energy companies their position is they're not even issuing prices at the moment, and you almost sense [a] palpable panic within these energy companies because they're in unchartered territories.
Just had our electricity renewal prices through, projected to go up from the c£80k for this year to £252k - a 215% rise.
— Joe Cussens (@joecussens) March 1, 2022
What the hell are we going to do @RishiSunak ?@UKHospKate@morningad@PubsAdvisory@BIIandBIIAB
“It's almost as worrying as when we entered the pandemic because it's just such a staggering amount, it’s almost like your annual profit just wiped out in one swoop and it's not as if it's that in isolation, it’s that on top of everything else, it's really not great at all.”
Breakeven year at best
On top of soaring energy prices, pubs also face a rise in VAT from 12.5% to 20% in April, increase in employers National Insurance and minimum wage and supplier issues and costs all as the cost of living has been estimated to be rising to the highest for 30 years.
For Bath Pub Company, it’s expected 2022 will be a year of breaking even with Cussens stating he’s confident the company will survive but “it will be a year where we won’t make any money”.
He also explained a big worry was the “judgement call” regarding how much cost increase can be passed on to customers before they stay away from pubs.
Cussens said: “We're working on a budget at the moment and trying to plug in a whole load of figures, because we're increasing our prices; we have to.
“We haven't yet sat down and seen what it does to everything, but my guess is we're looking at a breakeven year at best, but we will undoubtedly have to increase prices, probably more than we were originally anticipating.
“Financially, [this] could absolutely be the final nail in the coffin for operators.”
Thrown to the lions
According to the managing director, pubs need help and support from the Government now before it’s too late, as energy companies are making healthy profits and the rest of the economy has been “thrown to the lions”, but with so many mitigating factors, it is hard to know what to do for the best.
He added: “It seems crazy to spend all this money supporting these firms with furlough schemes and grants and so on, and at the final hurdle for us to fail because of this energy crisis.
“A windfall tax on some of these big energy firms who can afford it, to spread around the rest of the economy and help businesses get through what is going to be a difficult period, would seem, to me, a sensible way to go.
“Another solution would be to defer the increase in VAT to give a bit more cash to these businesses.
“I don't know what can be done, but what I do know is if they don't do something, it's going to put an awful lot of otherwise viable businesses out of business.”
