The chief executive of the British Beer and Pub Association is a passionate advocate for her industry and wants the public to have confidence in its pubs. Katherine Price talks to her about the journey to recovery
What are the key concerns for British pubs and brewers now? Are they different across the regions?
Obviously we're not even open fully in Wales yet, so there have been regional challenges, and it hasn't been helpful for people to have to understand the variances. It's been a challenge full stop; it's the biggest crisis to hit the industry, and we have to focus on the survival of those that still can't open and still can't make their businesses viable. That may be because of restrictions and mitigations that they can't implement, or it could be because they're still part of a local lockdown. We have pubs that are music venues, which, without that entertainment factor, are simply not going to make the same amount of money. There are still other fires to be putting out.
But capacity is the big one. All of this guidance, all of these restrictions, all of these mitigations are deemed necessary for public health, but they restrict our capacity to recover. Even those who get to the point of reopening, or have reopened, there's still no guarantee that they're going to make it through, because capacity is reduced on average 30% before you've even opened the door.
We've had no-shows on reduced capacity, and that just deflates you even more. You need to be running at the full capacity of your reduced capacity right now to be making a difference
You need to be running at the full capacity of your reduced capacity right now to be making a difference
People are slowly building up their confidence, which is great, but we've still got a long way to go, particularly to make them feel comfortable to stay for longer in a pub or to have a family meal in the pub. We're working on giving them the confidence to do that.
Is your focus to get distancing down to one-metre-plus across the regions?
That's the biggest obstacle that operators have to rebuilding trade. But then there are fixed costs looming and we need to get help and assistance on those, so getting a business rates extension is key to making sure everybody has the support to carry them through.
We campaigned for a reduction in VAT from 20% to 5%. We got that, sadly not for beer or alcohol, which is a bit of a kick in the teeth for our wet-led pubs, but it will make an enormous difference to the broader industry. So, we'll take that, but we need that next thrust, which is the business rates relief extension.
And then we want to see a 25% beer duty reduction, which will have an impact on our brewers, who have been the unsupported people here. They weren't classified as hospitality, they didn't get grants, and it's been very, very difficult for them to find their way through this. Reopening is great, but a lot of that is still guesswork – what kind of volume do they need to be brewing three weeks ahead of time?
We've challenged the beer duty because the industry was under a lot of pressure even before the crisis, mainly due to the tax burden. It is enormously important that we find a way of tackling the existing problems, and supplementing them with what we need to change to survive the crisis.
To what extent will the Eat Out To Help Out scheme help pubs?
It's a really important message that it's safe to go out. What's also important was the message that perhaps people haven't quite twigged, which is to go out on the quieter parts of the week. To help us on our quiet days would rebuild trade and compensate for the trade we're losing overall. If we see increased trade, even at reduced capacity on Monday to Thursday, it's going to help us make up for the capacity reduction on the Fridays to Sundays, where we would have been making our profits.
It will be really interesting to see, as a scheme like this has never been run before. For our food-led venues this is going to be something that will maybe drive people towards them. We worry that other pubs won't feel the benefit of this because they don't do food, but you can use it against soft drinks and non-alcoholic beverages, so even wet-led pubs can still be making that discount for their customers up to the maximum of £10.
Do you think the job retention bonus will help prevent further redundancies?
It's going to be a bonus for those who can survive through to January, but there are still many businesses that will be struggling to see the end of this year. While the prize is over there in the distance, we still need support now to know we can get there.
What do you think of government support for the pub sector over the last months?
We couldn't have survived without it. The furlough scheme has held us up and kept a lot of people going. And now we just need to see if we have a business model where we can break even and begin to sustain ourselves. VAT and the Eat Out To Help Out scheme is valued at about £700m to the industry. Hospitality has been hit the hardest and the longest, and it will continue to be so for some time, so the government stepping in has been absolutely essential to even giving us hope that we might be able to see a way through this. But it will need continual vigilance and intervention to make sure the industry can survive.
Hospitality provides one in six jobs; we have just under a million jobs in the beer and pub sector alone. When we are strong, we can deliver those jobs; we can deliver that growth. Many people have their first job in hospitality and they learn an awful lot of skills, even if they go off and do different things afterwards. Around 43% of our workforce is under the age of 25 – if we're not able to offer those jobs, that training, there's almost a whole generation that won't get that exposure, that first job on their career ladder.
I think the government and the chancellor see that when we are strong, we can deliver economically, we can deliver on jobs growth, and I think that's why they've invested so heavily in hospitality and in the beer and pub sector.
Do you feel that the government understands the value of the hospitality industry?
I think it understands now, due to our very intensive lobbying and the creation of the hospitality support team within the Department for Business, Energy and Industrial Strategy to give that extra knowledge about what hospitality needs, can deliver and does.
From a Department for Digital, Culture, Media and Sport perspective, we're part of tourism, but we're also part of our culture, and I think that the social value is valued more now than it was before. If they want that to continue for the beer and pub sector, they're going to have to invest in it. And they have. But we can always have more and so we try to direct them to the moves that would have the maximum impact to allow us to continue delivering on government policy objectives on jobs, growth and levelling up.
There's another opportunity that we need to be thinking about, the other challenge that's coming at the end of this year, which is Brexit. From a brewing perspective, we have a great, global brand in British beer. We are known the world over for our beer and our pubs, so we could be doing an awful lot in terms of finding those global opportunities and looking at exporting if we have a strong domestic business back at home. We need to be fostering, strengthening and investing in the industry so that we can take advantage of those opportunities.
Are you concerned some pubs promising price cuts following the VAT reduction could be undermining its purpose?
The chancellor has made this move on VAT, and it is very welcome. Some may need to make a promotion to drive that footfall, and they will be able to find ways to incentivise that. Others will need a little bit of support back for the investment they've put in for all this mitigation. But our line is that it's very much at the discretion of the business.
What the chancellor wants is a strong business that survives this crisis, and whichever method of using that VAT cut is best for you and for your business, that will mean you survive this crisis with as many of your team intact as possible – that is what the chancellor wants.
Have you been impressed by how pubs have flexed and pivoted their businesses?
The passion we have in our industry for our industry never fails to amaze me, and the way that businesses have thought about new, innovative ways of doing things, putting different offers out there, still finding ways to be part of their community, is truly inspiring.
It's going to be enormously important in the future because we don't know what's going to happen. We don't know if there are going to be local lockdowns or a secondary spike that affects the whole country, and we have to be prepared. We're learning to be incredibly agile, to adapt and to innovate, and those that do, and do it well, will probably survive.
What is your key message to operators?
Keep the faith. Keep going. Keep doing what you do best, which is serving people, hosting people, putting smiles on people's faces. Utilise everything that you can. If you haven't applied for a grant that you can apply for – do it. If you fall outside of that, apply to your local council for a discretionary grant if you are struggling. Sign up to the Eat Out To Help Out scheme if it makes a difference to you and your venue. If you don't do food, it still might be of benefit from a soft drinks perspective. Make sure you understand how the VAT cuts can assist you and look at adapting for the future and ways to innovate. But also thank you for being there, for doing the test and trace, and playing your part in the fight against coronavirus.
Keep the faith. Keep going. Keep doing what you do best, which is serving people, hosting people, putting smiles on people's faces
When do you think the pub sector will start thriving again, rather than surviving?
Some of my members would say it would be a year to get back to normal trading levels. We are delighted to have had what I would describe as a steady start to reopening. Many venues are probably about 40% down, so we're hoping we can tackle that. We're in the summer months so we need to make hay while the sun shines.
Staff are doing a phenomenal job getting used to new layouts, new working environments, new procedures, new ways of ordering. It will be a long but hopefully steady road to recovery.
Have you had your first post-lockdown pint?
Of course, it never tasted so good. I was so impressed with my tiny, local Grade II-listed pub. I thought it was really going to struggle, but it managed to digitise and offer fabulous fresh beer and food. It was so lovely to be back. OK, we're all socially distanced, but we are all back in the pub feeling that life is getting back to normal.
I wondered how pubs are going to cope with all this stuff and they just have to because they know they need to innovate. They want to be able to open, they want their customers to feel comfortable. But it has come at a cost. We estimate the whole sector has invested about £450m in mitigation costs alone. That's an additional cost on top of having no income for the past months, so it is a big investment that we've put in as an industry. We're saying to the government: match us, believe in us, invest in us, and we'll deliver for you when we get through this.
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