Government has not done pub sector ‘any favours’, says Draft House founder

13-Dec-2017 - Last updated on 13-Dec-2017 at 10:46 GMT

Let down: Charlie McVeigh has hit out at the impact of business rate rises

UK Government policy is harming the ability of pubs to hire staff and expand their business, according to the founder of London pub chain Draft House.

In an interview with The Morning Advertiser, Charlie McVeigh said that the Government “has not done the sector any favours” and hit out at the impact business rate rises have had on the chain’s property costs.

“Like a lot of people we feel like a bit of a cat in a bag over business rates just because there doesn't seem to be any real way of appealing some of the increases,” he said. “They have been out of all proportion to rent levels, and added a very expensive increase in our property costs.

“The Government has not done the sector any favours, other than by controlling beer duty,” he continued. “It seems like every move is design to make us less keen to hire people and I just don't know why that would be."

Optimistic outlook

McVeigh added: “Why don't we want to get more people employed, create a labour shortage and get wages up by natural means rather than by imposing it on people? We are a very labour-intensive industry and things like the minimum wage rise and rising pension contributions have been very damaging for us.”

Despite this, McVeigh stressed he had a positive outlook of the pub industry for 2018. “I remain an optimist and despite all of the doom and gloom that we are hearing I believe it will be a good year for people in the wet-led pub business,” he said.

“The pub business is in danger of being infected by all the doom and gloom around the restaurant sector, but they are very different. I don't think there are anything like the headwinds facing the pub business that there are facing the restaurant business.

“We don't have Deliveroo (yet), they haven't worked out how to bring a pub into someone's front room yet,” he continued. “We don't have the same degree of exposure to food in Draft Houses' case, so the food price inflation has not been as devastating to us as it probably has been to our restaurant competitors."

Supermarkets not a concern

McVeigh added that he was not worried by increased competition from supermarkets. “I sort of welcome supermarkets stocking a greater range of beer because I think it educates customers, and the truth is that the preferred way to drink beer in the UK remains on draught,” he said.

“It is hard to get a pint of draught beer in the supermarket, so the ultimate way to drink your favourite beer is always going to be on draught in a beautiful glass, and I think that protects us to a certain extent."

On the subject of what trends would prove popular in 2018, McVeigh stressed pubs needed to focus increasingly on experience to continue to attract customers.

“People spend a lot of time at a desk in front of a screen, so anything that creates a visceral experience for the consumer is going to be a successful trend,” he said. “Whether that is simply having a barman who really knows his stuff and can talk passionately about beer, or whether you are introducing something like shuffleboards or games, it is all about experience now.

“It is no longer just about going out for a pint and then coming home. People want to learn something or have an experience, and I think that is only going to get stronger.”