The Pub Sector in Decline

The Pub Sector in Decline

The great British Pub is an iconic symbol throughout the world. Nobody does the village pub like the British. It is probably the thing that most expats miss the most. However many are under threat and nearly 50 a week shut, many never to re-open.

It is a very depressing statistic, especially for someone like me who is a real ale enthusiast. I like nothing better than travelling around the country finding new unspoilt pubs from those with chocolate box looks to the corner pub unchanged in 60 years. each has its own unique character.

However they are an endangered species. The landlord nowadays will generally find himself a tenant of a large pubco. The pubco exists to make money and hence rents are usually exorbitant. Often also the landlord is tied into taking beer which the pubco sells on to him at a far greater price than he could buy himself direct. The result is that in order to make any money the price of the typical pint may now be over £3. This is not a price that can be sustained in the current economic malaise. This is coupled with the fact that you can buy beer from a supermarket cheaper than you can buy water. People are therefore buying supermarket beer and drinking at home.

The government with its policy of racking up beer duty in the misguided and blunt attempt to stop binge drinking is exacerbating the already dire situation.

The result of all this is that prices are too high and so people only go out now and again. As turnover falls so the need to raise prices creeps in to cover costs which leads to less sales.

Eventually the rent cannot be paid and the tenant leaves, usually with a mountain of debt. Many ex landlords find themselves with no choice but bankruptcy.

Sometimes a bar can be saved if it is not tied to a pubco, via the pre-pack administration, but often it is a creditors voluntary liquidation with the lease sold on to a new enterprise.

Certain pubs can survive and indeed the British Public house has been around in some shape or form for 100’s of years and so it is almost a given that they will adapt and survive. The question is how many and in what form.

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