Hospitality Ulster and breweries call for action on soaring energy costs
The government has been urged to intervene to save pubs fighting soaring inflation and energy price hikes.
Research from Hospitality Ulster, carried out in association with CGA, said bar sales would need to increase by 25% over the next few months to keep up with inflation.
Last year the industry here lost close to £240m in drink sales, with business down 40% on pre-pandemic levels.
While outlets have now resumed normal trading Hospitality Ulster chief Colin Neill said the latest figures do not take account of the current cost of doing business with businesses “struggling to break even” and consumer confidence “showing a downturn as we approach autumn”.
“In reality we would need to see an increase in turnover in excess of 25% just to keep pace with cost inflation,” he said. “But we have reached a retail price ceiling and simply cannot pass on the costs, which are now increasing almost on a daily basis.”
The research said that 35% of pubs and bars say they have been “severely impacted” by the recent cost of living crisis, with 58% impacted to some extent.
Rising costs triggered by the Russian invasion of Ukraine have pushed up inflation to 40-year-high of 10.1%, while a winter of soaring energy prices is also coming.
Last week supplier SSE Airtricity increased its domestic tariffs for electricity by over 35%, while gas prices will rise by 28.3%.
Mr Neill, above, added: “As cost prices continue to rise and consumer spending power reduces it is a very bleak picture unless we see substantial interventions by government for both the struggling families and the struggling businesses like hospitality, that provide a living for 72,000 people.
“The cost of living pressure which has been highly impacted by the massive hike in residential energy costs means that any disposable income people once had to allow themselves to go out for a pint, a meal or a local weekend break has now sadly been obliterated as household income is immediately redirected.”
The news came on the same day leaders of six of the UK’s largest breweries called on the government for “immediate government intervention” on sky-high energy bills this winter.
Unlike households, businesses aren’t covered by a regulated energy price cap, meaning bills are higher.
The pub and brewery owners from six companies – JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan, Greene King and St Austell Brewery – sit on the board of the British Beer and Pub Association (BBPA).
In an open letter to the government, they urged immediate intervention, including a support package and a cap on the price of energy for businesses.
Chris Jowsey, boss of Admiral Taverns which has 1,600 pubs, said his tenanted pubs now pay more in energy bills than they do in rent.
He told the BBC’s Today programme that one of his tenants wrote to him saying he was leaving after 20 years due to his electricity bill going up 450% – an increase so large he couldn’t pass onto customers.
The Department for Business, Energy and Industry said “no government” would be able to control the “global factors pushing up the price of energy and other business costs”.
“But we will continue to support the hospitality sector in navigating the months ahead,” a spokesman added.
