On Tuesday 15 September, Paul Ainsworth (Barnsley CAMRA) and Dave Pickersgill (Sheffield & District CAMRA) had a short meeting with Miriam Cates, the recently-elected MP for Penistone and Stocksbridge.
The discussion included several areas: the effect of lockdown on pubs and breweries (both local and nationwide), the pubs code, business rates, community pubs and international trade.
Pubs and bars were closed from late March until, at the earliest, 4 July. Many pubs have struggled to reopen, having invested their dwindling reserves to do so safely and securely in line with Covid-safe guidance. We believe that support is required as they struggle to reestablish.
Last month, the British Beer and Pub Association said more than a third of pubs failed to break even in July, and a quarter of pubs and bars were uncertain their businesses would still be viable by 2021.
Sales at pub, restaurant and bar chains halved in July compared with last summer. Trade in bars was down almost two-thirds (63%) and pubs saw a 45% slump in the first month that businesses were able to reopen.
The furlough wage support scheme has allowed many pubs to retain their staff. In lockdown areas and in struggling areas, many pubs and bars will be forced to close unless the government agrees to extend the furlough, which is due to be withdrawn. Miriam believes that this furlough scheme ‘was one of the best in the world.’ However, she is also in favour of the scheme ending as it is not financially sustainable beyond October, especially given that debt is now at 100% of GDP. Other support schemes are available but the priority must now shift to creating new jobs She also mentioned the ‘possibility that pubs won’t be able to operate at full capacity for a year.’ Miriam did, though, agree that ‘pubs are vital to local communities’.
Alcohol was excluded from the government’s six month VAT cut from 20% to 5% designed to stimulate the hospitality industry. More than 60% of the UK’s 47,000 pubs are “wet-led”, meaning they make more money from alcohol than food. This puts them at an immediate disadvantage. Miriam defended this difference.on the grounds that lines have to be drawn somewhere and often difficult decisions made.
Pubs are also facing huge rent bills with nearly all of the major pub companies (the exception being Admiral Taverns) opting to defer their demands, or offer a discounted rate, instead of cancelling payments as business has dried up during the pandemic. This is likely to lead to opportunistic planning applications, as pubs continue to close. Miriam mentioned the impact of ‘Big chains not willing to have a conversation about rent.’
There are currently 153 community owned pubs in UK. None has gone bust. Miriam was very interested in how this figure could be increased. It was agreed that we would provide suitable written background material. She ‘wants a return of small independent retailers.’
The Pubs Code was introduced in 2016. Since then Publicans have expressed bitter complaints about the financial impact of the “beer tie” – the arrangement that governs the relationship between large pub companies that own thousands of pub premises and the tenants who run the business. We believe that an urgent review of the not-working Pubs Code is required. Miriam committed herself to writing to the Small Firms Minister, Paul Scully, on this point.
CAMRA will be asking for extension to the business rates holiday which runs out in March 2021. We also want to see business rates system for pubs to be reformed with a low business rates multiplier for hospitality business generally.
Miriam stated that Business rates in general need looking at compared to other European countries. She ‘completely supports the need for business rates reform’ saying they could be based on takings not the size of property. She is also concerned regarding possible holes in Local Authority finances given that rates revenue goes directly into their coffers.
During lockdown, breweries saw a much reduced outlet for cask beer. There was much ullage, and many staff were furloughed. Some breweries increased their direct sales while others had no income as they had no packaging facilities. Some took the opportunity to deep clean, rebrand and/or review. For example, Penistone-based Brewery Whitefaced (named after local sheep: the Whitefaced Woodland) have put in a planning application for a new bar and location for their nano brewery in central Penistone. Miriam promised her support for this development. (The other brewery in the constituency is Korrupt Brew Co (also Penistone)).
We also discussed the effect on breweries of current trade talks. Many UK Breweries, including both Korrupt and Whitefaced, make extensive use of aromatic hops from Central Europe, New Zealand, and USA. We have major concerns regarding supply after the end of this year – both continuity and cost – it is likely to be more difficult to import (more/new paperwork).
Miriam stated that it is vital that ‘vital that we get a free trade agreement.’ We should ‘put everything into negotiating that deal.’
All breweries need support as they reestablish.
Paul Ainsworth & Dave Pickersgill