Pubs can’t work with business rates ‘ambiguity’

Mountstevens also believes incoming good weather could be more important for the on-trade than the upcoming men’s football Euros tournament.

Talking to The Morning Advertiser​, he states: “The structural issues are still there in terms of the pressures such as utilities but the position is improving, which is good news but there’s still huge ambiguity on business rates and needs to be resolved.

“Individual pubs haven’t paid business rates at a full level since 2019, it’s a material line in everyone’s P&L, the tax system is fundamentally unfair and we want to invest in towns and small communities but [business rates] are the one line on the horizon that make you think ‘where does that go in 2025 and 2026?’, businesses want surety and going from Budget to Budget to Budget is just no way to work.

“[Business rates] need to be put on a fairer basis and recognise that people are there creating jobs and opportunities up and down the country and the tax system needs to be fair and currently it is just not.”

Mountstevens includes the “huge online retailers” in his analysis as a tranche of businesses that are not facing the same taxation as hospitality sites in the UK and says: “This is not just a pub story, this is a town high street story to make sure we have a fair business rates system that means all the businesses, be it the pub, the hairdresser, the newsagent, are all sustainable because they’re fundamentally important to communities.

Bated breath​

“You won’t find any politician who argues against that but we are in a position where we wait with bated breath at every Budget or whatever it is as to whether this discount is going to remain or not is no way to run long-term businesses.

“Pubs bring people together don’t they and they play an important part in that society as do hairdresser’s, coffee shops and all those other things.”

Although the colder weather has lasted longer than many hoped or expected, his update on pubco Star’s position was cheerful.

“Given that we’re in sort of Siberian weather conditions business has been remarkably resilient,” he says.

“We had a strong finish to the year last year and everyone had a really good Christmas but in terms of our lettings, opening closed pubs and getting our capex away in the second half of last year, that was strong.

“And it’s been strong in the first quarter of the year and we are materially ahead of where we were in the first quarter of 2023.”

He adds good, well-invested and well-run pubs are still firmly there when it comes to how consumers want to go out and socialise – with every customer doing so differently – but he is looking forward to the summer with hope of some better weather and the Euros tournament.

Make outdoor spaces fantastic​

“We have to remember the weather was pretty ordinary in July and August last year but we’ll see… however, the consumer metrics seem to be improving too,” Mountstevens recognises.

“We can’t do anything about the weather but what we can do is to invest in the spaces and work with our pubs to make sure the outdoor spaces are fantastic.

“The interesting thing is we do become increasingly event-led and weather is an event and can be a bigger movement on the dial than some of the big football tournaments, for example. It does drive incremental consumers into pubs and then they have a great time and there’s a knock-on benefit effect.”

He adds he is an optimist but is so with information that is based on facts.

He explains: “It’s quite timely because Heineken goes through strategic planning cycles and we’re right in the middle of that and are bidding for investment into the UK and specifically into pubs. Heineken doesn’t blindly do that because there are other global opportunities.

“If you have good operators at pubs that are well run, there’s a really good future because they cater for a plethora of consumer needs and pubs have been here for a long time and it’ll be here for way into the future so I’m really positive in that respect you know there are there are challenges and bumps in the road that we’ve got to work our way through.”