Star launches new energy deal for licensees

Star Pubs & Bars has negotiated a new energy supply deal with British Gas for its licensees to help mitigate the energy crisis facing the pub industry.

With many energy companies viewing the hospitality sector as risky, Star licensees have been reporting that they can only get energy supplied by signing up to contracts with premium prices, lengthy terms, high security deposits and hidden extras that add up to 60% to their bills.

Following the collapse of several energy firms, Star says that its licensees are also concerned about the security of supply from lesser-known operators.

Under its new energy scheme, Star will bulk and forward buy energy from British Gas on behalf of its pubs at times when the market is lowest to ensure competitive prices. Licensees sign up to a one-year agreement to cushion them against the anticipated surge in energy prices in the autumn, while giving them the flexibility to renegotiate their contracts in autumn 2023 when prices are expected to fall. There are no additional charges and – subject to approval on a pub-by-pub basis – deposits are not required.  

Participating pubs will have access to an online portal showing how they use energy.

"Energy is a pub’s second biggest cost after wages, so the current energy issues are a major challenge for the trade," says Mark MacDonald, head of pub services at Star Pubs & Bars. "The energy market is complex, and people need expertise to navigate the terms and conditions of the different agreements. Some of the four- and five-year contracts available look attractive now but could prove very expensive when the market corrects.  

“Our aim is to simplify the process of securing a good energy deal for our licensees by creating a transparent agreement built around their best interests. All of our 140 managed-operator Just Add Talent pubs will be on it. By using our managed pubs’ buying power, we’re able to offer great rates and terms to our leased & tenanted licensees, too.”

Star Pubs & Bars, which is part of Heineken UK, says it receives no financial benefit from its energy scheme.

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