Kate Nicholls: 'If we can demonstrate the strength of feeling as a sector, it's more likely action is taken'

By Kate Nicholls, chief executive, UKHospitality

- Last updated on GMT

How to support UKHospitality #FiveAsksForOfgem

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The energy crisis of the last 18 months has been extremely tough for the nation’s pubs, particularly coming hot on the heels of the pandemic.

There was almost no time in between the two for pubs to even start a meaningful recovery and, alongside the relentless onslaught of price rises in other areas, many great publicans have been forced to shut their doors for good.

What’s particularly frustrating is that this is a scenario out of our hands. There was no way to predict a war in Ukraine that would see energy bills shoot up so quickly and an ensuing cost-of-living crisis that would keep them there.

The only thing in our control has been our reaction and response to these adverse times. In typical hospitality fashion, we’ve done what we’re best at – using our resilience and innovation to make the best out of a bad situation and find our way through the chaos.

The same cannot be said of the energy suppliers.

We’ve all seen the astronomical rise in profits being reported by the energy companies, which time and time again is a kick in the teeth for the pubs that have been forced to stump up significant security deposits, deal with ridiculous standing charges, or been refused a contract full stop.

Throughout, we’ve been in the ear of Ofgem and Government. We’ve been telling them what you’ve been experiencing – the mistreatment of the sector, refusal to negotiate when prices fell and downright disregard for hospitality.

Immediate communication

They took that feedback seriously and our campaigning contributed to Ofgem reviewing the non-domestic energy market, with a specific focus on hospitality. That review borne out exactly what we warned was happening. It clearly said that hospitality has been disadvantaged and that the sector was not seeing a marked improvement in the market, with many struggling to secure a contract.

Crucially, they made several recommendations, which we wholeheartedly support, and can drive real change in the energy market.

First and foremost, they are encouraging suppliers to work with hospitality businesses to resolve the issues many are facing with fixed energy prices far above current market levels.

We support that but believe this needs to go beyond encouragement and that there needs to be an immediate communication to suppliers to this effect from Ofgem.

They’ve also recommended measures be put in place to prevent the blacklisting of entire sectors, like hospitality. This is essential because the current business energy market for the sector is wholly uncompetitive. All too often, we hear from pubs that can’t obtain a quote from other suppliers so have no choice but to continue with their current supplier, at extortionate cost.

Other critical areas of work they’ve suggested for action include delivering greater transparency for customers, widening access to the energy ombudsman and to improve the regulation of energy brokers.

We will be responding in the strongest terms to Ofgem that these recommendations need to be implemented swiftly by both the regulator and the Government, whichever is more appropriate.

Wasted time

Too much time has been wasted already and every week that goes by means more and more pubs are either closing or getting dangerously close to their demise.

Thankfully, we’ve already seen a fantastic response from businesses in the sector to rally behind our #FiveAsksForOfgem and respond to the consultation themselves.

This is absolutely critical. If we can demonstrate the strength of feeling as a sector, it is more likely that action is taken.

Time is of the essence. There’s less than a week to go until the consultation closes on Wednesday 6 September and we need as many people as possible to respond.

I’d strongly urge everyone reading, if they haven’t already, to join hundreds of your colleagues in hospitality in responding. We’ve even made it super easy and simple for you – just click here to respond​.

I know consultations aren’t everyone’s cup of tea but this is really important. If you make time for responding to just one this year, please make it this one.

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