Blog
Paul Oakley
Head of Research and Analysis
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SCOTLAND’S PUBS & BARS CLOSING AT TWICE THE RATE THAN ENGLAND
The Scottish Beer & Pub Association (SBPA) and Scottish Licensed Trade Association (SLTA) have joined forces, calling on the Scottish Government to pass on funding for their sector following the UK Chancellor’s Autumn Statement which will see English businesses receive a 75% reduction in rates bills in the financial year 2024-25. Pubs elsewhere in the UK benefitted from the reduction last year, however the Scottish Government chose not to pass on the reduction – despite Barnett consequentials being given to the Holyrood administration. That has resulted in permanent closures in the sector accelerating at double the rate in Scotland (1.7%) than in England (0.75%). In a joint-statement, the SBPA and SLTA said: “The failure to pass on rates relief last year was a devastating blow for Scotland’s pubs and bars and has resulted in a record number of permanent closures. Already in 2023, with a quarter still to go, permanent closures are more than one-third higher than the whole of last year and double the closure rates across the remainder of the UK.“Many businesses are still saddled with debt incurred during the pandemic and have been unable to recover with the increased financial pressures in the aftermath, including sky-high energy prices, inflationary pressures and impacts to supply chains. “The next financial year will also see increased costs in the form of wages, with increases to minimum wages which will need to be paid for directly by the business. The rates relief in England will help businesses there with this increased cost, but unless the Scottish Government passes on the support, pubs and bars north of the border will be left to entirely fend for themselves and the rate of closures will only increase. “The Scottish Government must ensure that the rates relief is passed on in full or it will cement further closures in the sector, directly resulting in job losses and blows for communities across the country.” A copy of the SBPA and SLTA's budget submission can be viewed here.
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BEER & PUB SECTOR DISAPPOINTMENT AT LACK OF RATES RELIEF IN BUDGET
Commenting on the Scottish Government’s budget announcement today (Thursday), the Scottish Beer & Pub Association (SBPA) has warned the decision not to replicate the business rates relief will be met with disappointment from hospitality operators. Emma McClarkin OBE, CEO of the Scottish Beer & Pub Association said: “The lack of an announcement on business rates relief for Scotland’s pubs is hugely disappointing and will be met with dismay by many operators. Both the UK Government and Welsh Government have ensured that eligible businesses there will receive a 75% discount on rates next year, after a 50% discount for the entirety of this year. In comparison, Scottish businesses have been back to full rates since the summer. This puts Scotland's pubs at a significant disadvantage in their recovery given the challenges they are facing. “We’re glad the Finance Secretary’s has listened to industry and agreed to freeze UBR. This will provide a greater degree of certainty moving into 2023, but does not make-up for the failure to replicate the 75% discount the trade had been hoping for. “From Perth to Paisley, Stranraer to Stornoway, licensed premises are trying desperately to hold on amidst a perfect storm, with increased business costs and customers who are being more careful than ever about what they’re spending, they are being squeezed at both ends and profit margins are being wiped out. “We still desperately need additional action from both the Scottish Government and Westminster to save our much-loved pubs. Staff shortages, pressures throughout the supply chain, rising business costs, and unfathomable energy prices with inadequate support, are all adding together to create an extremely hostile environment for businesses. When coupled with increased regulations, including an unevidenced and unwanted Tied Pubs code, and impacts from Deposit Return, there is still a real uphill struggle for many to survive. Without our pubs and brewers our communities will be poorer not only economically but socially. “Investment is critical to our sector’s survival and growth, and we remain committed to working alongside Government to ensure that Scotland remains competitive, and the sector can continue being a bedrock of the national economy.”
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Beer & Pub sector comment on DRS with one year to go
Commenting on Scotland’s Deposit Return Scheme (DRS) due to go live one year to the day and the release of the producer fees, Emma McClarkin, CEO of the Scottish Beer & Pub Association said: “With just one year to go before Scotland’s Deposit Return Scheme is set to start operating, there is a lot of work still to be done. Establishing producer fees is critical so producers can plan ahead and assess the impact on their businesses. Unfortunately, this will put even more financial pressure on both brewers and pubs at a very difficult time as they battle with soaring energy costs and labour shortages. The combination of a deposit and additional producer fees, themselves very significant amounts, will particularly impact products such as beer sold in smaller single-serve containers, often as part of multipacks. “The Scottish Government have shown that they are mindful about the cost of doing business and have supported calls for a range of measures, but they need to be acutely aware that the producer fee is just one of a myriad of costs attached to a DRS. Labelling, new IT systems, staff training, security, storage, and fraud risks will all come with significant expenditures. There also remains several elements still to be finalised, such as VAT treatment and the on-line takeback model, that with just a year to go is causing significant concerns among businesses. “We are committed to working alongside the Scottish Government and other stakeholders to deliver the best possible DRS, but without wider relief to the costs of doing business currently we risk losing many of Scotland’s brewers and pubs before DRS even starts.”