UK: Pub closures mount in recession

By | 22 July 2009

Up to 52 pubs are closing down every week across the UK as a cocktail of recession, tax and costs eats into profits, new figures show.

The figure, which represents average weekly closures for the six months to the end of June, have been released today (22 July) by the British Beer and Pub Association (BBPA).  

It shows a marked rise from a rate of 39 pub closures per week in the last six months of 2008.

Tax rises and extra regulatory costs are to blame for exacerbating a decline in the on-trade amid the backdrop of recesssion, said the BBPA, which said the closure figures were compiled by CGA Strategy, the market research agency for the on-trade.

BBPA chief executive David Long said: "The last two Budgets have seen a 20% increase in beer tax, which alone has added more than GBP600m to our tax bill.  In addition, Government continues to press ahead with the Mandatory Code of Practice, which they say heaps at least GBP30m of extra red tape cost on pubs in the first year alone."

He added: "Every week, a further 461 jobs are lost in our sector."

Others in the on-trade blame the legal bond between pub tenants and pub companies for adding to the pressure. In May, the House of Commons Business & Enterprise Committee said that the so-called "beer tie" was "exacerbating" the financial difficulties pubs face.

Pub companies deny that the "tie" is the source of the problems. Enterprise Inns, one of the largest pub groups, said last week that the rate of pub closures in its portfolio was up 50% on last year. Around 800 pubs were on special rent discounts to keep them afloat, Enterprise said.

In the last three years, 5,134 pubs have closed, leaving 53,466 pubs in the UK, the BBPA said. 

Its figures show that pubs not serving food have been the worst hit, closing at a rate of 51 per week this year. Cafe-style bars and branded pubs, meanwhile, are still opening at a rate of two per week.

Sectors: Beer & cider

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