Mr Emeny at The Counting House, Fuller's pub in central London Photo: Eddie Mulholland
Pub and restaurant closures to increase by ten times without a cut in business rates, the head of Fuller's has warned, as companies brace for a sharp rise in their tax bills.
Simon Emeny, chief executive of Fuller's, has warned that the large number of pub closures in 2023 will only accelerate without radical government intervention.
He said: “The number of pub and restaurant closures that have occurred this year will increase tenfold unless the Government extends small business rates relief.”
More pubs will close. in the first half of this year than throughout all of 2022 as tax collectors grapple with rising food, energy and wage costs.
Inflation stood at 6.7% in September, meaning gross business rates in England will rise by as much as £2 billion in April next year without any government action, according to advisory group Altus.
Mr Emeny said: “You will see further pub closures until the government finds a fairer way of raising taxes through business rates.”
“The tax burden on pubs is enormous. Our industry accounts for 0.5% of UK revenue, but we pay 2.5% of UK business rates, so we pay a disproportionate share of our revenue.”
Accounts are calculated by applying a multiplier to the taxable value of the property. The multiplier typically increases each April in line with the inflation rate in September of the previous year.
In 2022, the government introduced a new tariff reduction scheme for retail, hospitality and leisure businesses, offering up to 75% discount on bills with a maximum of £110,000. However, it expires in 2024.
This means average pub rates will rise from £3,900 to £16,900 and average restaurant rates will rise from £5,000 to £21,600, Altus said. .
Despite persistent inflationary pressures and the prospect of soaring tax bills, he believes pubs have an “innate, incredible ability to grow and survive.”
Mr Emeny added: “If you look at what has happened , in the last 20 years we've had a global financial crisis, a smoking ban, a huge difference between [pub] prices and [supermarket] prices.»
He accused the Tories of compiling a «catalogue of errors». it has hampered the growth of the hospitality industry over the past 13 years.
He said: “We have had terrible leadership in this country during [the pandemic].”
“This meant that so many mistakes were made which affected so many people, be it schoolchildren, people struggling with their mental health, or a country overburdened with debt as a result of the costs incurred.” /p>
However, while business leaders including Carpetright founder and Tory donor Lord Harris have denounced the Conservatives in recent months, Mr Emeny has stopped short of throwing his support behind the opposition.
He said: “[Labour's] agenda, which frankly is still a work in progress, remains focused on more intervention and more regulation. This is not what the country needs to get back to serious growth.»
He said he believed «the adults are back in the room» with Rishi Sunak in Number 10, and noted recent moves such as as a reduction to the official targets Net Zero and HS2 showed «strong leadership».
Fuller has around 400 sites across the UK, employing more than 5,000 people.
Mr Emeny said Fuller's pubs had not been hit as hard during the cost of living crisis because its pubs attracted wealthier customers. «We have deliberately built the business in the wealthier parts of Britain,» Mr Emeny said.
Although the company had raised prices due to inflation, he said it had tried to keep them «as low as we can.»
Despite rising inflation, he said people were drinking more expensive lagers and ales when they visited Fuller's pubs.
«Our customers think that if I go out, I will enjoy really good quality drinks. We see our most premium products growing the fastest.”
He added that Fuller's will not sell beer produced by brewers that have weakened their positions recently to save on taxes.
Mr Emeny said: “A customer falls in love with a particular brand because of its taste and the way it is prepared. And if you start fiddling with the decoction, you do so at your own peril and risk. I'm not a fan of it at all.”
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