Suffolk publicans speak of ‘big risks’ to the industry as they fight to survive over the coronavirus crisis
PUBLISHED: 05:30 25 April 2020 | UPDATED: 09:42 01 May 2020
Pub operators have spoken of the huge challenges to surviving the coronavirus crisis as pressure mounts on the Government to extend support to the hospitality sector.
Tens of thousands of pubs, bars and restaurants were forced to close their doors last month as the Government increased measures to stem the spread of the virus, leaving business owners with little or no money coming in.
The latest pub closure figures from CAMRA (the Campaign for Real Ale), which relate to 2018, reveal 14 pubs are closing their doors each week in England, Scotland and Wales, and there are fears the current crisis will accelerate this trend.
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Suffolk pub and brewery companies have spoken to us about the “big risks” for the sector, with its businesses being amongst the first to close and likely to be some of the last to have restrictions lifted.
The Government’s job retention scheme has been “hugely helpful”, said Roxane Marjoram of pub group Gusto Pronto Ltd, but they have only been able to access grants for two of their pubs, the Beerhouse in Bury St Edmunds and the Crown at Hartest, as they are under the £51,000 rateable value threshold.
Her and husband David’s other three pubs, the Cadogan at Ingham, the Fox at Bulmer Tye, near Sudbury, and The One Bull in Bury St Edmunds, do not qualify as their rateable value is over the £51,000 limit.
The BID (Business Improvement District) in Bury St Edmunds is backing a national campaign called #RaiseTheBar to increase the grant threshold for retail, leisure and hospitality businesses.
Mrs Marjoram, who also owns Brewshed brewery with David, said: “It’s the larger properties that lose out on grants and they are not immune or at any less risk economically because of the pandemic than a smaller pub.
“They are likely to have a higher level of fixed overheads that they cannot reduce.”
With the exception of themselves, Mr and Mrs Marjoram have furloughed their entire team of just under 90 people, but one member of staff has now returned to work at Brewshed, which is offering a takeaway service.
Mrs Marjoram said the two £25,000 grants were “hugely appreciated, but it goes quickly”.
“There are ongoing costs. By furloughing all the staff that’s made a huge difference in terms of job security for the time being, but there are other costs we have to pay. We cannot cancel our insurance for example.”
On the subject of insurance, she said insurers not paying out was another issue within the sector.
In her case, they have a human disease policy extension, but says her insurance company’s stance is they are not covered because Covid-19 was not specifically named in the policy clause at the time they took it out in July 2019.
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Mrs Marjoram also flagged up rents as a huge area of concern, adding “if we really want pubs to come out of this at the end” these payments should be cancelled over the closure period.
She said a major worry is the potentially long period of time hospitality businesses had to be able to survive while remaining closed.
“We are fighting with everything we have got to get through this,” she said.
‘The crisis is a game changer’
Sean Driscoll operates five pubs in East Anglia including the Masons Arms in Bury St Edmunds and the George in Hadleigh, neither of which meet the threshold for a Government grant but “they are the ones that need the most support”.
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Mr Driscoll, whose 55 staff at MetroInns (Suffolk) Ltd have all been furloughed, said the Government acted “swiftly and decisively” to bring in the job retention scheme, but the grants needed to be fairer so “everyone gets a slice of the cake”.
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He said the crisis was a “game changer” for the industry.
“Pubs and restaurants will be amongst the last businesses to reopen and once they do it’s a great unknown.
“We don’t know how people are going to react. Unless there’s a vaccine on the market or a cure, people are going to be wary.
“People will be used to not going out.”
He added: “I reckon there will be a huge amount of casualties in the sector. Hopefully we will get through it and be here on the other side.”
Both Mrs Marjoram and Mr Driscoll mentioned the knock-on effect on suppliers in the hospitality sector.
‘The support schemes in place must be extended and enhanced’
Mike Kirkham, business support and marketing officer at Bury BID, said they want all businesses to be given fair financial support, but some were “falling between the cracks”.
Mark Cordell, chief executive of the BID (Business Improvement District) in Bury, said: “To a degree our businesses are being punished for being based in a prosperous town and it’s all a bit of a postcode lottery. Having said that I fully acknowledge the Government have done a lot. It’s a difficult decision and we do have to set some criteria.”
He said the impact of the coronavirus pandemic on the town was “very concerning”, but he liked to think that its reputation as a food and drink destination and with the support of local people it could return to that success.
He added: “But it’s probably not going to be as quickly as any of us all like. And in the interim some of these businesses in that sector will cease trading unless they can get help.”
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Kate Nicholls, chief executive of UKHospitality, gave evidence to the House of Commons Treasury Committee this week outlining the problems being faced by hospitality businesses hit hard by the Covid-19 crisis.
She said many businesses were struggling to access support and others were excluded from schemes.
She said 71% of hospitality business is carried out in a venue with a rateable value of above £51,000 and therefore ineligible for a grant.
“Government support for businesses has been swift and it has helped many businesses get over the initial shock of the crisis. It is clear, however, that too many businesses are struggling to access support and that the schemes in place must be extended and enhanced.
“Hospitality was the first sector to be hit hard by the crisis and it will be one of the last to make a recovery. Even when lockdown measures are lifted, our sector faces a huge challenge in getting customers back through their doors and finding solutions to social distancing measures that are likely to be in place.”
Tom Stainer, CAMRA’s chief executive, said the Government needed to confirm the support package would be extended to cover pubs until all restrictions were lifted and should consider an extended support package post reopening in recognition it will take many months for businesses to recover fully.
“Breweries and cider producers must also be included in a hospitality support package to help them re-open once the crisis ends,” he added.
The Government’s Department for Business was approached for a comment.
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