"Doomsday Scenario:" 70% Of British Pubs May Not Survive Winter As Power Costs Skyrocket

A troubling survey commissioned by trade publication the Morning Advisor revealed the entire British pub industry could be on the brink of a tsunami of closures this winter if the government fails to intervene in power markets to ease cost pressures.

According to the survey, 70% of respondents say if electricity prices continue to soar, they will be unable to operate and forced to close up shop — this would dramatically alter the landscape of pubs by next spring.

More than 65% of the pubs surveyed said power costs rose more than 100%, 30% said utility costs jumped 200%, and 8% experienced 500% increases. Most pubs warned they couldn’t afford the exponential rise in energy costs.

One pub told The Guardian the utility company had quoted them a 600% increase in power costs versus their current contract.

Heath Ball, managing director of the Frisco Group, which operates three pubs across the southeast of England, offered an apocalyptic warning that pubs were facing a “doomsday scenario” in just a few months when the cold season begins.

“This energy bill crisis comes on the back of the most testing of times as businesses try to recover from the Covid crisis and I think it poses an even greater threat to the survival of pubs,” Ball told the Morning Advertiser.

He even said some pubs were being rejected new power contacts because utilities deemed them “high risk.” Ball said lawmakers need to resolve the energy crisis soon or “find a solution to this now or face mass pub and restaurant closures.”

There are more than 46,000 pubs across the UK in 2021, according to British Beer and Pub Association (BBPA), with about half of them being independents.

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Emma McClarkin, chief executive of the BBPA, said:

“Rising energy bills are putting pubs in real jeopardy. Sudden, extreme price hikes are already forcing publicans to make tough choices, from reducing opening hours to cutting options on their menus.

“We are experiencing a perfect storm that is not only shrinking but eradicating profitability margins. We urgently need an energy price cap for small businesses before extortionate bills cripple pubs and we lose them forever in communities across the country.”

Then there’s the supply of British pubs’ life and soul: beer. A shortage in fertilizer production due to soaring natural gas costs has slashed the availability of carbon dioxide, an essential ingredient in producing carbonated drinks, including beer. This will undoubtedly make the situation worse for pubs:

McClarkin told Fortune:

“A guaranteed supply of CO2 is essential for operations across pub and brewing businesses and this announcement comes at a time when they are already facing extreme rising costs, threatening to close businesses and damage people’s livelihoods.”

Without government support, a large swath of the UK pub industry could be wiped out this winter. When will Europeans wake up that Western sanctions are completely backfiring and crushing their way of life at the expense of NATO’s proxy war against Russia in Ukraine?

Source: ZeroHedge

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