Why the British pub is ‘under acute pressure’ and what can be done

The pub and hospitality industry is navigating “extreme cost pressures” and needs support. But how might this be tackled? db finds out.

Speaking to the drinks business, UKHospitality chair Kate Nicholls, said: “The challenges facing hospitality businesses have risen right up the national agenda this year, due to the extreme cost pressures facing the sector. It’s critical that there is clear focus on what will genuinely support and safeguard hospitality venues and the communities they anchor.”

‘Implement the maximum possible 20p discount’

The UK government has rumoured to be preparing a business rates overhaul for pubs following pleas from the hospitality sector were made to the Prime Minister last week. The move followed pressure from operators.  Prior to this, db outlined the challenges that were being faced by the beer, pub and hospitality industry, from business rate hikes through to the new one-pint driving rule, have been met by extreme concern from across the sector.

Nicholls explained: “What we’re seeing right now is a sector under acute pressure, with sharply rising costs and the tax burden tilting even further against bricks-and-mortar hospitality. Our recent analysis uncovered that the average pub is facing a 15% rise in its business rates bill next year, adding almost £13,000 over the next three years. That’s on top of energy, food and wage inflation that businesses have already absorbed.”

Nicholls told db: “While there has been public recognition from the government that these increases will be challenging for many venues, what the sector urgently now is a hospitality-wide solution to a hospitality-wide problem. The government should implement the maximum possible 20p discount to the business rates multiplier for all hospitality venues.”

‘To blame Labour for industry issues would be unfair’

Renowned publican and beer expert Mark Dorber who co-founded The Beer Academy and ran the White Horse in south London for 26 years making it a destination for beer adorers, now runs both the Anchor at Walberswick in Suffolk and The Swan at Stratford S.t Mary in Colchester. Describing the issues the hospitality sector is facing, Dorber told db: “The industry problems are not recent, but the extra costs of NI and changes to business rates are.”

Insisting that the issues ran deeper than tit-for-tat political mud-slinging, Dorber pointed out that much of the national press on the topic was looking to rally against parties, rather than address the problems that have long been stacked against the sector and said that going forwards “to blame Labour for industry issues would be unfair, though easy copy.”

Instead, Dorber suggested there were other elements at play that needed to be addressed and have been the case for some time. He explained: “Competition issues and especially the dominance of supermarkets and large off-sales chains lie at the heart of market ‘distortions’ as I see it.”

Dorber noted that “the issues are very complex” and highlighted how “the problems were not properly addressed by the MMC enquiry in ‘88 and all parties lack the political will to help the ‘survival’ of the pub.”

‘The wider cost environment remains complex’

As the owner of a historic hotel and a community coastal pub, Giles Fuchs, owner of Devonshire-based Burgh Island Hotel and the Pilchard Inn, said: “These venues are not only businesses but anchors of local economies, heritage and social life, supporting jobs, tourism and local supply chains, while often managing higher operating costs, seasonal trade and limited footfall growth.”

Fuchs identified that “the wider cost environment remains complex, with rising wage costs, energy volatility, national insurance changes and broader tax pressures continuing to shape decision-making” but admitted that “at the same time, there is an opportunity to ensure that support measures work alongside wider economic recovery, helping well-run pubs and inns to adapt, invest and grow sustainably.”

Mulling the issues, Fuchs told db: “What the sector would benefit from next is a long-term, targeted approach that recognises the cultural and economic value of pubs beyond headline tax receipts. Meaningful protection for rural and heritage-led hospitality businesses, alongside constructive support for skills, infrastructure and sustainability, would help ensure these institutions can plan confidently for the future and continue to invest in quality and experience.”

He observed: “If government is serious about protecting Britain’s pubs, building on this momentum with a clear, long-term framework that supports viability, resilience and responsible stewardship will be key to securing their future.”

‘Assuming it will bounce back regardless of policy is complacent’

Echoing the sector’s value to the nation’s economy and its communities, Nicholls added: “Hospitality contributes over £93 billion to the UK economy and supports 3.5 million jobs. Pubs in particular are economic drivers and social lifelines — the heart of both rural and urban communities. Given the right conditions, hospitality will thrive, but assuming it will bounce back regardless of policy is complacent. We need fair rates, cost stability and targeted support now, or we risk losing not just economic assets, but social lifelines to communities.”

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