By Scott Wright

MAJOR names from the world of brewing and pubs have issued a direct appeal to the UK Government for support to help the industry through the energy price crisis, warning that hikes of up to 300 per cent on pre-pandemic bills will result in businesses closing and jobs being lost.

As pressure grows on Downing Street to outline how it will support the country as it faces unprecedented increases in energy bills, chief executives of leading brewers and pub groups have written to the Government and the Conservative leadership candidates stressing the need for emergency aid.

The letter, signed by six business leaders, warns of the “real and irreversible” damage that the energy price crisis will cause without a support package that caps prices for business. It underlines that the crisis is being felt across the brewing and pub industry supply chain, highlighting that CF Industries, a major manufacturer of carbon dioxide, will be ceasing production, citing market conditions. Brewers say they have seen the price of malt double.

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The letter is signed by the chief executives of Belhaven owner Greene King, Carlsberg Marstons, Admiral Taverns, St Austell Brewery, JW Lees and Drake and Morgan, who make up the board of trade body the British Beer & Pub Association.

It comes shortly after Ofgem, the energy watchdog, announced the latest increase in the consumer energy price cap on Friday, which from October will increase the annual bill for typical dual-fuel households to £3,459 per year. Prices are currently projected to rise much higher still, leading to fears people will be forced into poverty and businesses closing down as consumer spending comes under increasing pressure. Inflation climbed to 10.1 per cent in July and is forecast by the Bank of England to reach 13% in the coming months.

The letter states: “As chief executives of breweries and pub companies who are experiencing first-hand the hugely damaging impacts of the energy crisis, we feel compelled to write to you to calling for urgent support.

“Across our businesses we are witnessing price rises which are causing irreversible damage. Hikes can now be upwards of 300% on pre-pandemic energy bills, with the current average increase around 150% across the beer and pub sector, putting jobs and businesses at risk.

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“As more fixed price contracts come up for renewal this is only worsening. The time to act is now.”

The letter adds: “We urgently need the Government and the leadership contenders to outline a targeted support package for the sector.

“For example, along with a pause on levies, the introduction of an energy price cap for small businesses will go a long way to stop rocketing prices crippling pubs and breweries, and additional grant support will aid pubs before we lose them forever in communities across the country.”

Hospitality figures have warned that the current cost crisis, which extends beyond energy to severe inflation of overheads such as food and drink, wages and taxation, will pose more of a threat to the industry than the pandemic without urgent help.

The letter notes that energy prices are soaring just as businesses attempt to get back on track following the huge disruption brought by coronavirus lockdowns and trading restrictions, with many still dealing with debts accrued during that time.

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Paul Togneri of the Scottish Beer & Pub Association said: “The soaring cost of energy bills could prove absolutely devastating to the hospitality sector, completely wiping out profit margin for many and making continuing to trade impossible, forcing pubs to close for winter or shut their doors for good.

“There needs to be urgent action in the form of a price cap for business, but the Government should also look at whatever additional levers they have available to save pubs ahead of winter.

“Without action, we could see many communities lose their local and the jobs which go along with them. Breweries are also impacted, with energy costs, supply chain pressures, and wider issues – such as implementing a deposit return scheme – impacting on viability. Once appointed the new UK Government must act swiftly to alleviate the impact and save jobs.

“The Scottish Government must also look at what it can do to support industry, including lowering business rates and delaying introduction of policies which come with additional cost at this time.

“Without additional support from government, the energy crisis could prove worse than the pandemic for businesses across Scotland.”

Paul Davies, chief executive of CarslbergMarstons, said: “Without immediate, direct Government support, many of the UK’s craft and cask ale breweries will have no choice but to close for good. We are going to lose in one winter generations of iconic beer brands.”

The intervention from the British Beer & Pub Association comes after the Scottish Licensed Trade Association made a plea for support for the industry on Friday.

Colin Wilkinson, managing director of the SLTA, said it had also heard pub and restaurant owners are contemplating closing over winter because they will not be able to absorb the rise in energy bills.

Mr Wilkinson said: “Businesses need help and they need it now. There must be an energy cap for businesses, particularly for SMEs, perhaps based on the number of employees.

“It has also been suggested that the Government should introduce an energy furlough scheme to help businesses through this difficult time – in some ways, the energy crisis is having a more damaging impact on businesses than the pandemic.”