The Cornwall-based brewer and pub operator employs more than 2,000 people across the Southwest and operates more than 160 pubs in the region, in addition to its breweries.
According to a report from the BBC, St Austell said new employment costs would place “significant additional financial strain” on the business, totalling £3m per year.
The group detailed it would be “reviewing its operational structure”, which may result in up to 40 redundancies.
Teams in St Austell’s managed pubs will not be included in the process.
Difficult steps
CEO Kevin Georgel added the company, which has been in operation for 174 years, would take “difficult but necessary steps” to secure its future success.
The news comes after announcements in the Autumn Budget are set to come into effect next month, including a rise in National Minimum Wage and employer National Insurance contributions.
Georgel said it was “not realistic” to “pass on all the increased costs to guests or customers.”
The decision to explore redundancies was “not taken lightly,” he added.
Georgel added the brewing and hospitality sectors had faced a difficult few years and that these issues would be compounded by April’s increases.
“The company remains profitable, and we are making good progress against our long-term strategic plans and are outperforming many of our peers.
“In order to continue to invest for the future, we need to proactively manage and calibrate our costs to reflect the current market conditions.
“Our sole focus now is to work with our teams and support them during this difficult and unsettling period”, he continued.
Call for action
Previously trade body UKHospitality (UKH) estimated the rise to ENICs could cost businesses across the sector billions.
Meanwhile pub giant JD Wetherspoon (JDW) recently claimed the tax rise would cost the company around an extra £1.2m a week in employment costs.
Ahead of the Spring Statement, due to take place on Wednesday 26 March, operators and industry leaders have repeatedly called for action to address these issues and secure the long-term viability of the sector.
Moreover, an exclusive survey conducted by The Morning Advertiser (The MA) earlier this month revealed 80% of pub chiefs have planned to axe recruitment plans due to increases to wages and employment costs.
- Read the original story from the BBC here
