Star Pubs & Bars strikes energy deal for its licensees

By Gary Lloyd contact

- Last updated on GMT

Cost-of-living crisis: Mark MacDonald says all Star's Just Add Talent models will be on the energy deal
Cost-of-living crisis: Mark MacDonald says all Star's Just Add Talent models will be on the energy deal

Related tags: Multi-site pub operators, Pubco + head office, Tenanted + leased, Finance

Star Pubs & Bars has used its bulk-buying power to thrash out a money-saving energy deal for its licensees that will last for a year.

The deal that has been struck with British Gas has been agreed to help cushion the anticipated energy price hike for Star’s licensees.

Star Pubs & Bars, the pub arm of Heineken UK, said as many energy companies view hospitality businesses as “risky” because its licensees have reported they can only get energy supplied by signing up to contracts with premium prices, lengthy terms, high security deposits and hidden extras that add up to 60% to their bills.

Following the collapse of several energy firms, Star licensees are also concerned about the security of supply from lesser-known operators.

Buy when prices are low

Star’s energy scheme – which is run by its energy partner Inspired Energy – will allow the pubco to bulk and forward buy energy from British Gas on behalf of its pubs at times when the market is lowest to ensure competitive prices.

Licensees sign up to a one-year agreement to cushion them against the anticipated surge in energy prices in the autumn while giving them the flexibility to renegotiate their contracts in autumn 2023 when prices are expected to fall. There are no additional charges and – subject to approval on a pub-by-pub basis – deposits are not required.

To help licensees track and reduce their energy consumption, participating pubs will have access to an online portal showing how they use energy. This, combined with Smart Meter installation, improves billing accuracy and reduces the need for estimated bills.

Biggest cost after wages

Star Pubs & Bars head of pub services Mark MacDonald said: “Energy is a pub’s second biggest cost after wages so the current energy issues are a major challenge for the trade. The energy market is complex and people need expertise to navigate the terms and conditions of the different agreements.

“Some of the four and five-year contracts available look attractive now but could prove very expensive when the market corrects.

“Our aim is to simplify the process of securing a good energy deal for our licensees by creating a transparent agreement built around their best interests. All of our 140 managed-operator Just Add Talent pubs will be on it. By using our managed pubs’ buying power, we’re able to offer great rates and terms to our leased and tenanted licensees too.”

Star Pubs & Bars said it will receive no financial benefit from its energy scheme.

Related topics: Star Pubs & Bars

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