Mark Bates has run the Three B’s micropub in Bridlington, East Yorkshire, with his wife Cheryl for three years. But he feared the business would not be able to survive amid climbing costs.
The pub had been tied into a three-year energy fixture ending this year. A letter from current supplier EDF estimated if the pub went on new standard variable rates, it would pay £11,765.04 per year – a 471% hike from its current rate of £2,062.01.
This would be completely untenable for business, said Bates, who called the situation “absolutely ridiculous”.
On the new standard variable rate, the standard charge was also climbing by 10 times. Currently marked at 25p, it would rise to £2.50 regardless of how much the unit price was going up, according to the operator.
This comes after the British Beer & Pub Association warned energy regulator Ofgem was moving at a “glacial pace” when it came to discipling suppliers and putting hundreds of thousands of businesses on the verge of collapse.
Struggle to survive
Bates believed it was “absolutely unfair” that energy companies appeared to be profiteering by increasing the standard charge in such a way.
If he went with the variable rate, Bates feared the micropub, which was small and didn’t attract thousands of customers, wouldn’t be able to survive.
The whole thing seemed “pretty disastrous”, and he felt it was “really unfair” for energy companies to expect these kind of charges, with costs expected to go up in the second week of June if the business gave notice to end its contract, and opted for the 'extended supply' option.
EDF Energy said there had been extreme volatility in wholesale energy costs over the past two years and it understand the impact this was having on its customers.
A spokesperson added: "We’re continuing to offer competitive fixed deals and in this instance, the customer would only move over onto the higher priced extended supply rates if they don’t fix.
"Our customer services team will reach out to the customer and will discuss the best options available to them.”
Alternatively, if the pub chose an ‘easy fix’ option, standing charges would rise to 60p and the estimated annual bill would increase to £5,762.45, according to the letter from EDF.
On top of rocketing energy costs, the pub was tackling the climbing price of goods including beer and cider. While staff were desperately trying to keep costs down, they’d been forced to hike beer prices threefold in the last 12 months.
The issues with energy meant the micropub, which offers three to four craft ales, 11 ciders and a range of gins, would struggle to keep costs down.
“It’s just non-stop,” said Bates. “We’ve had no support from the Government, and prices just keep rising and rising.”
The micropub includes 30 seats inside and six outside and is child and dog friendly.
He’s seen four local pubs close in the last few months and feared many more hospitality businesses would shut down if they hadn’t already.