By Emma Harwood
At this time of year pubs, venues, cafés and restaurants should all be enjoying the boost in trade brought by warmer weather and the Easter and May bank holiday weekends, while looking forward to a season of events and festivals which our vibrant town is renowned for.
Instead they have been closed for nine weeks and, following the government’s publication of a ‘roadmap’ guide to restarting the economy, expect to be the last to reopen their doors in July – at the earliest.
While this may offer a glimmer of hope, it also raises questions about how viable reopening will be for all these businesses while adhering to social distancing rules.
As Bob Tipler, co-landlord of The Albion in George Street points out: “It remains to be seen whether we are ‘allowed’ to open in July. I think a lot depends on whether, with the loosening of the lockdown, infections and particularly death rates will start to rise.
“The main issue for pubs and restaurants is what level of business will be there for us when we do open. That will depend on how safe people feel about going out, how much money they have, and how secure they feel about their finances.”
Dave Sansbury, 66, has been landlord of the Horse and Groom in St Leonards for almost a quarter of a century. His normally busy free house is viewed by locals as a hub of the community.
Dave Sansbury outside the (closed) Horse and Groom
PICTURE: Emma Harwood
“It’s driving us all potty,” he says. “But probably me more than some, because I’m used to being pushed from pillar to post, going to the bank, ordering, deliveries, changing barrels, then there’s all the paperwork. We’re a busy little place. I miss all the characters and the carry-on – it’s great fun.”
Rates Holiday, Grants and Furlough
Financial assistance has come in the form of a 12-month business rates holiday and a non-repayable sum of £25,000 from the Retail, Hospitality and Leisure Grant Fund (RHLGF) for businesses with a rateable value of between £15,000 and £51,000. Smaller businesses will have received a cash grant of £10,000. In addition, the Coronavirus Job Retention Scheme (CJRS) has allowed employers to furlough regular staff at 80 percent of their wages. This has now been extended until October, but after July business owners will be expected to contribute towards it.
As Dave Sansbury suggests: “Any free house should be able to survive if they’ve got a bit of money in the bank as long as it doesn’t go on too long. But if you pay rent to a brewery or a pub company, you’re in a different situation.”
Pubs will need to have the utmost flexibility and the
minimum of outgoings to get through this|Bob Tipler
Large pub companies such as Stonegate, which recently bought EI Group (Enterprise Inns) have faced criticism for not cancelling rents for smaller pubs. Some licensees have been more fortunate. Kent-based brewery Shepherd Neame has waived rents for all its tenants for the period of closure.
“We all got a bit of a grant,” says Bob Tipler, “but that grant is to cover the down period when we’re not taking any money. We’re going to need some working capital to get going again when things do open up. You can’t just pull money out of nowhere.”
Small Brewery Woes
For small breweries, however, things look even tougher.
Robin Wright, owner of Pig and Porter Brewing Co. in Tunbridge Wells, employs just six members of staff, but like many small breweries has fallen through the cracks in terms of accessing business rates relief and grant funding. “One of the things that affects us”, he says, “is that all of our beer is sold to pubs rather than in cans and bottles to off-licences and supermarkets. When the pubs shut, that was all of our trade gone in the blink of an eye.”
His brewery is not eligible for the RHLGF because, as he says, “despite being entirely dependent on the hospitality industry, we’re not in it, we’re a supplier to it.” And, despite being a small business, he’s not eligible for a small business grant either because he has not received business rates relief.
“We don’t qualify for the simple reason that we have two small units, one to brew the beer and one to store the beer. They’re not big and they’re not lavish – but, because we have two, we don’t qualify for rates relief, and that is being used as the simple tool to decide whether you’re eligible for the small business grant.”
Robin, who lives in Hastings, has applied for a business interruption loan, a scheme delivered through the British Business Bank, which is the only way his brewery may be able to survive the crisis. But accessing this may also be difficult. “The last stats I heard were that there had been 160,000 applications and 3,000 had been approved, the rest turned down,” he says.
The British Beer and Pub Association, British Institute of Innkeepers and UK Hospitality are among a number of industry bodies lobbying the government on behalf of breweries, demanding they receive easier access to loans, as well as rates relief and the same grant funding as pubs and restaurants. They also want further grants made available to all businesses while they remain closed.
“Due to the unique nature and wide range of pubs – no two pubs are the same – for many, it may be a considerably longer time until they can fully re-open”, says Chief Executive, Emma McClarkin. “We believe that pubs should only open when safe to do so, but without additional support now, many more of our nation’s pubs and the brewers that supply them with beer will struggle to survive closure and beyond”.
And for many pub owners the future looks glum. Businessman Kieran Canavan bought The Jenny Lind in the High Street on 24th February, just weeks before pubs were ordered to close from 21st March. While banks have given a mortgage holiday, he still has to find interest payments of several thousand pounds a month, with no money coming in. On top of this he’s paying rent on two large pubs in London and across his three bars has lost upwards of £60,000 worth of stock.
“I was looking to retire from London down to Hastings and have that as my retirement package,” he says.
“But the way things are I don’t know if I’ll be able to keep it going or not. The banks are offering loans, but it’s the interest on loans – you’re going to put yourself in debt for another five or six years.”
As summer rolls on, questions will remain about how much of the hospitality sector will survive if venues are forced to trade at a greatly reduced capacity without further financial assistance.
As Bob Tipler points out: “Pubs will need to have the utmost flexibility and minimum of outgoings to get through this. In spite of what some may think, margins are so small in pubs, the taxes on beers are so high, and so are the rents and rates. You’re doing really well if you net ten percent on the turnover. If you have a massive shortfall in business but you’re stuck with quite onerous business costs, it’s going to be quite difficult, I think.”
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