Hospitality set for £800m increase in energy costs

Pubs and bars across the UK are being refused energy contracts from suppliers.

Pubs and bars across the UK are being refused energy contracts from suppliers, placing them under additional financial burden as they look to recover from the pandemic. 

Throughout dealing with Covid-19, the hospitality sector has faced ongoing energy issues that have become increasingly worse. Businesses are reporting increases of 150% on pre-pandemic energy bills, with an average above 100%, equivalent to an £800m additional cost to the sector, according to the British Beer & Pub Association (BBPA).

The trade body says that cost increases on this scale risk wiping out already narrow margins publicans receive and could have a knock-on effect on pricing. 

The BBPA says that there has been an increase in the number of utilities providers refusing to take on new accounts or renew contracts if they are linked with hospitality. Some providers will initially quote for a business, but will then renege on signed agreements leaving companies with little or no choice to secure a new provider. 

“Struggling publicans that have managed to keep their heads above water throughout the pandemic now face a further financial hurdle that threatens the viability of their businesses and the ability for the sector to recover," says Emma McClarkin, chief executive of the BBPA. 

“The pub and brewing sector is at a pivotal point in its recovery and the erosion of margins is impossible to sustain. We are urging the energy regulator, the providers and the government to work with us and take a more pragmatic approach with regards to the provision of energy to the hospitality sector.” 

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