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Pub crisis: 27 close each week

Pubs have been closing at the rate of 27 a week – nearly four every day – over the past year as the savage impact of the smoking ban and spiralling costs combined to decimate the very heart of British life.

Many communities will now be left without a pub unless the Government acts now – starting with a duty freeze on beer – the British Beer and Pub Association (BBPA) has warned.

The stark figures from the BBPA reveal the pub closure rate is seven times faster than in 2006 and 14 times faster than in 2005.

In total, 1,409 pubs closed in 2007 – a sharp acceleration when compared to 216 closures in 2006 and 102 in 2005.

“Britain’s pubs are grappling with spiralling costs, sinking sales, fragile consumer confidence and the impact of the smoking ban,” said BBPA chief executive Rob Hayward.

“These figures show the stark reality of the pub trade today, in contrast to the hype surrounding the myth of ‘24-hour drinking’ and extended pub opening hours.

“Pub closures at this rate are threatening an important hub of our social fabric and community history. What we need to stop the decline is support from Government and the general public.”

Urban pubs – many wet-led and landlocked – have been hit the hardest with 2% of all urban pubs closing in the last six months.

A vital part of the British economy and social life is under the most severe strain it has faced for decades
Rob Hayward
BBPA

Plummeting beer sales

Beer sales have slumped to their lowest level since the Great Depression of the 1930s with 14m fewer pints being sold today than in 1979.

Total alcohol sales in pubs have plummeted by around 6% in the last 12 months and even a surge in food sales has not relieved the pressure as the additional associated costs of selling food have squeezed profit margins.

“Some commentators would have us believe that the pub trade has faced a bonanza following the introduction of the Licensing Act in 2005,” said Hayward.

“Nothing could be further from the truth. The industry is facing very difficult trading conditions, which is resulting in the closure of hundred of pubs across the country.

“This is no time to place further regulatory or tax pressures on a great national and community asset.

“A vital part of the British economy and social life is under the most severe strain it has faced for decades.

“Increasing these pressure and costs will only result in the loss of more of Britain’s much loved community pubs.”

Pubcos must play their part
Opinion with Ewan Turney, web editor

"One key factor is conspicuous by the very nature of its absence from the BBPA’s explanation of the record number of closures – the pubcos.

If the body which represents this sector is admitting the smoking ban and rising costs are taking a huge toll on the industry then so must the individual pubcos.

Let us hope this is a wake-up call to Westminster to freeze duty on beer, to increase rate relief for pubs and to lay off yet more layers of red tape.

But Government is a slow moving machine and the tide seems to be fast hurtling in the opposite direction with yet more tough new proposals to curb binge drinking put forward in the Licesning Act review just yesterday.

Alcohol disorder zones are also on the way and certain police forces seem hell-bent on a polluter pays scheme and blanket glass ban.

The budget is on 12 March and it would be great to think the Government would heed this wake-up call and freeze duty on beer.

But when one side is arguing for a 10% hike and the other a freeze – is the best we can hope for a small increase?

When newspapers and TV documentaries are full of tales of binge drinking and underage drinking, it would be a brave Government that does not at least opt for the standard 1p on a pint duty rise.

So, instead we must help ourselves as an industry if the immediate future of the pub is to be saved.

The smoking ban, spiralling costs, poor summer weather, floods and the consumer slowdown are all factors that a tenant or lessee can not control.

Greene King, often praised in these pages for its tenant support structures, made a move in the right direction last week by announcing it would absorb a 20% hike in insurance premiums and delay a beer price rise until May.

But clearly more needs to be done.

Struggling tenants and lessees are crying out for rent concessions and reviews which take into account the true nature of the changing trading environment.

Goldman Sachs estimates the average tenant's profits are down 10% since the smoke ban and yet that same average tenant will be hit with a 2.5% RPI rent increase every year.

Where are they supposed to find that money?

Interest among MPs in the pubco-tenant relationship is rising once more and Lib Dem MP Tim Farron has already tabled an EDM calling for "the Government to prevent the exploitation of pub landlords and to help save the great British pub”.

If we wait for Government to act to save our pubs, it may be too late.

Action, in the form of greater tenant support, is required now."

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