Kerridge: energy advice is ‘disgusting, embarrassing and horrific’

By Gary Lloyd

- Last updated on GMT

For starters: chef Tom Kerridge has issued two immediate demands from the Government
For starters: chef Tom Kerridge has issued two immediate demands from the Government

Related tags Finance Social responsibility Multi-site pub operators Pubco + head office Gastropub Food Freehouse

Chef and multiple operator Tom Kerridge has branded advice from political figureheads as “disgusting, embarrassing and horrific”, as the hospitality sector fights to stay alive.

When quizzed on advice from Boris Johnson about buying a new kettle to save £10 on energy costs and Edwina Currie’s tip on placing foil behind radiators to increase heat throughout people’s homes, Kerridge told The Morning Advertiser​: “It is the most disgusting, embarrassing and horrific sort of messaging you could come across. It is incredibly insulting. These people are so unconnected to the realities of life and I find it very strange that they’re in charge of running our country.”

Kerridge, who operates three gastropubs in Marlow, Buckinghamshire, also said he had received a renewal quote from his current electricity supplier at one of his sites that represented a 700% increase.

He explained: “We are shopping around. But the market is incredibly volatile. There are some offers out there and no offers at all from some companies but it’s all very, very expensive. And because it changes on a daily basis, you don’t want to sign up and get tied into a deal because you could get a better deal tomorrow or there could be help from the Government – you have no idea what’s going on.

The potential increase would take electricity costs from £60,000 per year to £420,000, which “isn’t viable”, Kerridge said.

Empathising with the pub sector, he added: “If you think of those small wet-led pubs where the operator lives upstairs, and their electricity costs go from £15,000 to £50,000 pounds a year. That just makes no sense. There’s no way an operator will take on that debt and why should they? It’s just absolutely terrifying.”

Shut down option

He continued: “So the option many operators are looking at are whether they have to shut down, or is there a possibility of just mothballing it, and opening again next year when the prices have become more settled or you don’t need electricity as much and don’t need the heating.

“The rumours are that this price volatility and increases is going to be not just something that’s happening over the next couple of months, it could be over the next couple of years.”

So what are the priorities for the Government? Kerridge believes two things must be sorted immediately. The first one being an energy price cap implemented for businesses.

He said: “The problem with businesses is they don’t have a price cap on them. We have price caps coming on domestic electricity use but there’s still 100% to 200% price increases and that’s terrifying.

“So we need a price cap on business energy and we also need a reduction in VAT because there is no point in giving a tax break to businesses that then comes out of the back end – there’s no point in corporation tax reduction because corporation tax is only payable if you make a profit. Many of these businesses are not going to be open, let alone making a profit.

“The help has to come front-end for businesses to be able to operate and that should be done through a VAT reduction and a business energy price cap.”

More problems

Kerridge said the Government was very helpful during the pandemic but there are many factors causing problems within hospitality now.

“In terms of food inflation rises, there are reports saying this could be heading to 18% to 20%, which has such a huge knock-on effect on the price of ingredients. Not only are you having to deal with the fixed costs, you’re also having to deal your butcher, fishmonger, supplier, farmer…  and they’re all having to deal with those price increases, as well as energy and inflation.

“It’s inevitable that your costs go up, which means your pricing has to go up to be able to exist. There’s also a huge amount of debt burden that many places would have taken on during the pandemic that is now having to be paid back.

“There’s a wage increase, as well as staff shortages, and staff shortages mean places are unable to open maybe seven days a week, and only operate on a five-day-week period. If a place lacks any revenue for two days a week they are unable to service any debt.

“Then we get to the point where what happens is the consumer, who is also getting hugely squeezed with, maybe, a 10% pay reduction in real terms, has less money in their pocket, which means they’re less likely to go and spend it on disposable things – whether it’s your social meeting up for a drink in a wet-led pub or going out for something a bit more special.”

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