Speaking at a UK Hospitality round table at the Admiralty pub in Trafalgar Square, London, Simon Emeny called on the Government to take action on business rates to try and allow companies like his to take more risks on investments.
He highlighted the development of the Admiralty as an example, which the company started work on in 2013, investing over £3m and creating 60 new jobs.
“We opened it on Trafalgar Day in 2014 and it lost money from day one, because that’s what happens when you build a pub from scratch, you have to earn a reputation - but two or three years later, it became one of the highest-taking pubs in the Fuller’s estate.
“The relevance of this is, that I suspect if this opportunity came up again in 2024, we wouldn’t take it, and there’s a very clear reason why.”
He accepted that a lot had changed over the last ten years, and there were things the Government had no control over, he pointed out that the cost of debt is now very high, 8% compared with 1% in 2013.
“Despite the fact that this is a fully electric kitchen and it’s very energy efficient, our energy costs are twice as high and staff costs have gone up significantly.
“Now, if you run a company like Fuller’s, one of the luxuries I have is that you can see through most of these short term problems.
“However, the biggest reason we’d be uncomfortable in investing is business rates. And here we’ve been absolutely walloped by the chancellor.”
He pointed out that the Conservative Government of 2019 committed to a reform of business rates. “We’re now at the end of 2023 and they’ve said that it’s too difficult and it’ll be left to the next Government.
“When we took this lease, the rateable value of this property was £184,000 and the uniform business rate multiplier was 47p in the pound. So we used to have to write a check for £87,000 a year before we took any money.
“In 2017, because the investment was good - we took the risk of the investment - the rateable value doubled to £372,000. But the multiplier now sits at 51.2p in the pound and if the chancellor doesn’t do anything about this at the end of November, it will move with CPI to just under 55p in the pound, so our business rates will be £201,000 a year, compared to £87,000.
“Now Fuller’s is a long term company, we’re well funded and we’ve got the debt capacity to take risks, but many of UKH members and many companies in the sector simply won’t be investing at the moment.
“Which is why we call on the Government to do something about freezing the multiplier as to where it is and not pushing taxes up as a result of inflation and also extending the relief to small business..
“This is a wonderful pub and we love doing things like this, this is why people like me get out of bed, to create things like this, but we can’t do that going forwards, which is a bit sad really.”