The BBPA and sector business leaders have today urged the Government to give a clear timeline and date for when pubs can reopen.
The call comes as it was revealed today that trading restrictions and lockdowns caused sales of beer to plummet by 56% in 2020 – down by £7.8 billion. Given the severity of the impact that trading restrictions and lockdowns have had on the sector, the BBPA and business leaders of the beer and pub industry have published a recovery roadmap to reopen pubs fully after the current lockdown.
The roadmap states that post vaccination of the most vulnerable, pubs must reopen when non-essential retail and other parts of the hospitality sector reopen. It also says that mandatory trading restrictions – such as alcoholic drinks served only with a substantial meal, no mixed households and the 10pm curfew – must be removed when pubs reopen in a timely way.
Upon the re-opening of the sector, the BBPA also says the Government will need to continue to provide financial support in the form of a stimulus package to ensure businesses do not fail due to unsustainable debt built up during the lockdowns. It says an extension to the VAT cut and business rates holiday will be essential, as well as a significant beer duty cut, to help pubs trade profitably once more and start to recover from 2020.
Without such a plan to reopen, trade viably and give further economic support to stimulate recovery, the BBPA says thousands of local pubs will fail due to their unsustainable debt and cash burn levels, resulting in local jobs and local pubs that are vital to communities throughout the UK being lost for good.
In Q2 2020 alone, which incorporated the first full COVID-19 lockdown, pub beer sales dropped by 96%.
In Q4 2020, when severe time trading and tier restrictions were placed on pubs, as well as a second full lockdown, pub beer sales dropped by 77% in comparison to last year.
Despite being able to open under less restrictions in Q3 2020, a temporary VAT cut on food and soft drinks and the Eat Out to Help Out scheme, pub beer sales were still down 27% for the quarter.
Philip Whitehead, Chairman of the British Beer & Pub Association, said: “This is not sustainable for our sector. We cannot continue to hold out under these circumstances. We urge the Government to provide clarity to our sector on when it can expect to fully reopen.
“As a sector we have invested hundreds of millions in ensuring that we provide places for people to safely socialise in. When pubs reopened in July we did so safely and successfully to world leading standards.
“When pubs can reopen, the restrictions they face – ranging from the substantial meal rule to the 10pm curfew – must be removed. They simply destroy their ability to operate as viable businesses.
“After nearly a whole year under forced closure, or open but under severe restrictions, pub trade has been decimated and sales of beer in pubs have plummeted by 56%. Furthermore, due to their revenue falling off a cliff in 2020, pubs are holding debt and have little to no cash left. We need the Government to continue to provide financial support for Pubs when they reopen to bridge the gap to full recovery and commit to supporting the beer and pub sector for the long-term with Duty, VAT and Business Rates Reform.
“Pubs need the VAT cut and business rates holiday for hospitality to be extended immediately, as well as a significant beer duty cut. These will provide vital support for pubs and stimulate demand and signal that Britain and its pubs are safe and back open for business.”
Nick Mackenzie, CEO at Greene King, said: “2020 was a write-off for pubs and the industry needs a clear plan for reopening as soon as it is safe to do so, without complex and unjustified restrictions which would make it unviable to open. We are grateful for the financial support the government has given the sector so far and this has really helped to protect jobs and stave off pub closures, but we urgently need confirmation on additional support given the long-term restrictions that have been placed on our sector.
“Pubs are the heartbeat of their communities and can play a really important role as we emerge from this pandemic, creating significant numbers of jobs and reconnecting people to help tackle social isolation that has affected so many people over the last year. But without publicans having clarity on reopening and additional support, there is a real risk of more viable businesses closing their doors in the weeks and months ahead.”
Kevin Georgel, Chief Executive, St Austell Brewery said: “Since March, we’ve worked tirelessly and collaboratively to support the battle against Covid-19. We’ve closed our pubs, invested millions in reopening safely and played a responsible role in balancing the public health risk and the economic impact. Despite these efforts, hospitality continues to suffer more than any other industry.
“As one of the West Country’s biggest employers, we urge the Government to provide us with a definitive reopening date to enable us to plan for reopening safely. We also need immediate and long-term financial support, including an extension to the VAT cut and business rates holiday. Finally, we must be able to reopen alongside other non-essential retail and without trading restrictions, that made it impossible for pubs to trade viably when the tier system was in place – including the 10pm curfew and rules involving mixed households and substantial meals.
“The Great British pub is part of our social fabric. It’s far more than just a huge economic contributor. The avoidable loss of these wonderful, historic, community assets will be felt by generations to come, if the Government don’t act now and provide clarity and further support.”
Mark Davies, CEO of Hawthorn, the Community Pub Company with over 700 pubs said: “As the owner of so many Community Pubs around the UK I cannot empathise enough how important it is that the Government recognises the role that pubs play in so many communities around the UK and that pubs are part of the fabric of our society. It is therefore crucial that immediate financial support is secured for the pub sector with Business rates and Vat an urgent priority and we need a fair and viable roadmap to reopening in a safe and socially responsible way as we did on the 4th July last year when we came out of the first National lockdown. A failure to do this will inevitably lead to business failure, loss of jobs and a destruction of community value in so many locations around the UK.”
William Lees-Jones, Managing Director of JW Lees, said: “We know that we can re-open safely with all the mitigation that we have put in place. We estimate that the current level of government grants and furlough support have reduced our losses by 50% but, like many breweries, 99% of all JW Lees beer is sold in pubs and more than half through our own 150 pubs in the North West. We can only trade if pubs are open and pubs in our heartland in Greater Manchester have now been closed for 14 weeks since 5th November on top of the 15 weeks from 20th March. This is clearly not sustainable, and we need to learn how to live with the virus as we re-open the country.”