Cost of living crisis: Lancaster pub landlord fears 'double whammy' means many venues might not survive winter

Energy regulator Ofgem, which sets the price cap on household bills, has said it would rise by 80 per cent in October.

But unlike households, businesses aren't covered by a regulated energy price cap, meaning bills are even higher.

Tim Tomlinson, chair of Lancaster Pubwatch, and landlord of The White Cross, Merchants, and Stonewell Tap pubs, said in many cases energy prices had already doubled since January.

His fears come as the leaders of six of the country's largest breweries called for "immediate government intervention" on energy bills this winter.

Pub owners said the energy crisis would cause "real and serious irreversible" damage to the industry without support.

In an open letter to the government, six pub and brewing groups - JW Lees, Carlsberg Marston's, Admiral Taverns, Drake & Morgan, Greene King and St Austell Brewery - this week called for urgent intervention, including a support package and a cap on the price of energy for businesses.

Rocketing energy bills come at a time when the number of pubs in England and Wales is falling, hitting the lowest level on record - 39,970 in June, according to analysis.

"In common with pretty much all businesses and private households, the hospitality sector is feeling the impact of increased energy prices," Mr Tomlinson said.

"However unlike residential customers there is no price cap for businesses so energy bills for many pubs and restaurants have already doubled since the start of the year and new quotes are coming in at multiples of three or four or even more than last year's bills.

"And this is on the back of increased food prices and from all our other suppliers and having just come out of a tremendously difficult two years of Covid.

"Customers are understandably budgeting much more tightly right now with all the cost of living pressures everyone is facing.

"We are seeing people going out less often and being a bit more careful with what they spend when they are out.

"So our sector, like all of retail, is facing the double whammy of reduced demand and increased costs, meaning we are going to have a very difficult time over the next few months.

"As a minimum the government needs to support for us in terms of some kind of energy price cap similar to that provided to residential customers, otherwise it seems likely that quite a few businesses might not make it through the winter."

This week the British Institute of Innkeeping (BII) also revealed the results of a flash survey of members on the devastating impact of the rise in energy bills.

With only one in four members in a fixed price contract secured before the recent price rises, the majority face huge uncertainty as they try to secure long term contracts for their energy needs.

90 per cent of respondents are seeing their prices at least double from the price they are paying now, and nearly two in three of those are seeing price rises of over 300 per cent, with one in two of those being quoted at 400 per cent or more.

The impact of these crippling price rises means that one in two businesses will now be loss making, and a massive one in three of those businesses will fail in the next three months.

Steve Alton, BII chief executive, said: “We have been sharing the data from our members with officials and Ministers in Government for many months now, leaving them in no doubt of the impact of increasing pressures of cost of business inflation and specifically the escalating energy crisis.

“The effect of these unprecedented energy price rises on our nations’ pubs has now reached a critical level. Behind these stark headlines, the reality for individual operators running essential businesses connecting people at the heart of their communities is simply devastating.

“This is not just about business failure and the loss of livelihoods for our members, it is the loss of jobs in local communities, homes for families and the vital lifeline that pubs provide for those facing isolation and loneliness in villages, towns and cities across the UK.

“The demand from consumers to return to our pubs after the central role they played in supporting their communities in the pandemic, has proven how vital it is for us all to reconnect with friends and family.

“If Government does not act rapidly to support these small businesses that not only do so much for their communities, but also provide vital business to local suppliers and brewers as well as significant tax revenues into the Treasury, they will be lost, in some cases forever.

“We are calling on Government to provide a meaningful cap for business energy, as well as grant support for our essential, safe spaces for all across the UK.

"We are also calling for at least a 50 per cent reduction in business rates for 23/24, as well as a significant cut in duty for draught beer and cider of at least 20 per cent on containers of 20l or more, to allow them to begin to recover their businesses.

“These measures alongside a reduced rate of VAT, encouraging consumers to continue to visit pubs during this cost-of-living crisis will be essential to ensure their survival.

“Without support, the alternative is simply unthinkable. The impact on the economy will be enormous, but the long-term damage to our unique heritage and the social fabric of our nation will be devastating.”