Hospitality leaders have called on the government to provide urgent clarity on when and how the sector can reopen or risk thousands more job losses and business failures.
The call came as the British Beer & Pub Association (BBPA) revealed that trading restrictions and lockdowns caused sales of beer to plummet by 56% in 2020 – down by £7.8bn.
Industry heads are also calling for an extension of government support upon reopening to ensure businesses do not fail due to unsustainable debt built up during lockdowns. This includes an extension to the VAT cut and business rates holiday and a lengthening of the furlough scheme.
Giving evidence to the environment, food and rural affairs (EFRA) committee inquiry into covid-19 and food supply this week, UKHospitality chief executive Kate Nicholls said the industry urgently needs the government to publish a clear exit strategy from lockdown measures: “If not precise dates then an indicative line of sight”. She added that it was not just the date of reopening that was important but the conditions under which businesses are allowed to reopen.
The BBPA, along with bosses from businesses including Greene King and St Austell, have called for restrictions currently faced by pubs – ranging from the substantial meal rule to the 10pm curfew – to be removed at the time of reopening. “They simply destroy their ability to operate as viable businesses,” said BBPA chairman Philip Whitehead.
Nicholls warned MPs that a significant number of jobs would be lost unless business support measures are extended beyond the end of March. She said that if businesses are able to open in the spring they expect to reach break-even by the end of 2022 and return to pre-covid levels of profitability by the end of 2022 or start of 2023. She added that if support mechanisms are extended the anticipated recovery will be brought forward by nine months.
The EFRA committee also heard about the impact the pandemic has had on businesses that supply the hospitality sector. James Bielby, chief executive of the Federation of Wholesale Distributors, said the lack of sector-specific support had been “devastating” for businesses. Wholesalers that have stayed open in order to supply public sector customers such as schools and care homes were doing so at a loss, he said.
Bielby added that the closure of schools at short notice along with restrictions imposed over the Christmas period had created around £12m of excess stock in the marketplace. “As we look towards the restart there is a specific cash flow issue that needs to be addressed and if that isn’t addressed by government it will be very difficult to restock and buy from food manufacturers to supply hospitality businesses,” he said.
The inquiry also heard testimonies from food poverty experts who spoke of a crisis in food insecurity that has been magnified by the pandemic.
The Trussell Trust distributed more than 1.2 million emergency food parcels during the first six months of the pandemic alone, according to chief executive Emma Revie. She said this was likely to be “the tip of the iceberg” since the Trussell Trust is just one of many charities operating food banks in the UK.
Fazilet Hadi, policy manager at Disability Rights UK, highlighted how 2.2 million disabled people are not getting the government’s £20 uplift to universal credit because they are on legacy benefits. “For many it’s a choice between eating and heating,” she said.