Pub insolvency rates fall, but remain high

Pub sector insolvency levels remain high in the second quarter of 2010, despite a slight fall in the first quarter of the year, new figures show.

The latest UK insolvency figures show that levels overall remain high, with administrations falling slightly but liquidations still at high levels.

Mark Wilson, partner at Baker Tilly Restructuring and Recovery LLP, said: "This quarter's insolvencies levels in the licensed trade may be a modest fall on Q1 2010 numbers, but are still as high as they were in Q1 2009 at the peak of the recession.

"The industry should remain cautious, particularly as the sector has been put on notice for the impending VAT hike."

The ongoing closures of many pubs throughout the UK and the fall of 6.3 per cent in beer sales in pubs and bars, according to the latest UK Quarterly Beer Barometer, will continue to impact negatively on the industry.

However, it is not all downbeat because although Company Voluntary Liquidations (CVLs) still remain high with a 10% increase from Q4 2009 to Q2 2010 there has been a slight decrease in numbers from Q1 to Q2 2010.

Another positive is that administrations have nearly halved since Q4 2009 and the use of Company Voluntary Arrangements (CVAs) remains relatively low.