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Pub prices could ‘go through the roof’ when energy prices rise

The average energy bill for a pub will rise by £18,400 a year, according to the British Beer and Pub Association.

BBPA is warning of a “cliff edge” as the government’s energy relief for businesses ends next month. 

The end of the Energy Bill Relief Scheme, which came into force in November 2022, will add further pressure to a sector that is struggling to retain profit margins, with over 560 pubs closing their doors throughout 2022 – more than during each year of the pandemic, BBPA said. 

Figures published by the BBPA show that pre-pandemic energy costs for an average pub were 4% of turnover. In March they represented 9% with the support scheme in play, but will rise to 12% without it.

The organisation is urging the government to insist suppliers offer a “window for renegotiation” to allow businesses locked into high rates to recover their cost base. 

Emma McClarkin, BBPA chief executive, said passing the rising costs onto consumers would result in prices going “through the roof”. “Last week the government extended energy support for consumers but left businesses out in the cold,” she said.

In January the association on the government to investigate poor practice by suppliers. UKHospitality has also demanded that Ofgem names and shames the energy companies that are treating hospitality businesses as a “cash cow”.