Sadly, the festive season is over for another year and up north in ‘Cheshire Cat land’, we have spent most of this week clearing snow from our car parks and the country lanes leading to our pubs. We used 40 bags of rock salt in the process for just two of our pubs situated opposite each other in one lane.
While I was doing this, with two industrious members of my team, I was stopped by a neighbour who kindly thanked us for our efforts and our community spirit but jokingly pointed out that surely we pay business rates for the council to do what we were doing. He then laughed, waved and walked on, muttering ‘bloody Labour’ under his breath.
In the slush and hail, I took a moment to lean on my shovel and contemplate his point. What do we actually pay business rates for? Thankfully, we were done for the day, the lane was clear of snow, so we returned to one of our fire-lit pubs for a well-earned hot drink and it was there that I Googled ‘What do we pay business rates for?’ The answer jumped up: “Business rates are the way businesses contribute towards the cost of local services”.
So what are these local services we are helping? A further Google moment followed.
“Business rates (sometimes called commercial rates) are a tax levied on business properties. The money collected is channelled by local authorities into services such as police, fire and waste management, in much the same way as council tax”.
Discount please
So we pay for waste management? Biffa empty all our bins and we pay Biffa for this, so we get no waste management support… discount please?
In rural pubs, crime rates are thankfully low… discount please?
They don’t salt our roads, they don’t clear snow, they don’t fill our potholes, they don’t actually do anything to deserve the amount of money we pay them through our hard work, entrepreneurialism and spirit. They squander and waste money everywhere.
The big surprise is what it doesn’t say, which is if we take a closed pub (we have taken on six closed pubs), our business rates start very low and as we build the business, create jobs, pay loads of VAT, a lot of duty, NI and other taxes, our business rates grow and grow. Not like council tax at all.
The more successful we are at the top line, the more we pay. No one cares about our profit, they simply want a slice of our amazing turnover. They say it is a tax and, of course, they are right, but it is a ‘success tax’. The more we sell, the more rates we pay irrespective of the costs we face and the profit we make. What they also don’t mention is that this is purely a ‘pub tax’ calculation because licensed restaurants pay on their square meterage.
I thought we were one hospitality industry with a level playing field? I have argued for too long that pubs are being discriminated against and if our industry bodies hired a decent barrister, they would win the discrimination case hands down.
Business rates are about to go up, of course, as the discount drops by 35% and rates are reassessed for many of us at the same time. It is simply shocking and while everyone is talking about it, no one has done a thing about it for over 20 years. All talk, no action and therefore no change. The continuing business rates issue has to be dealt with now.
Body is supposed to back pubs
We have one industry body telling us to ‘batten down the hatches’. Do they think we are devoid of common sense and ability? This body celebrated 1p off a pint like it was the biggest thing achieved for pubs for donkey’s years from a Labour Government that will wipe masses of profit off all our businesses after April. 1p a pint… really?!
In the new year ahead, the international lager brewers and the regional brewers will make millions of pounds out of 1p off a pint. For pubs, it is a drop in the ocean, negligible. This body supposedly represents pubs… they simply don’t because if they did, they would be lobbying brewers to hold beer prices this year in order to protect us, the pub industry.
The brewers take the duty ‘win’ and then put up the cost of our pints far more every year. I have already received an email before Christmas that warned me of a pending Heineken product price increase in the immediate new year. My point is we do not want to put our lager prices up this year after the Government have announced a minimal duty cut. It will hurt us and our lager sales in general and yet the British Beer & Pub Association (BBPA) sit there and do nothing. They should be called the BBA. Sorry but I am right… the big brewers are killing pubs through their greed and in the end it will all come tumbling down around them.
Finally, well done to one big brewer, Guinness, for its amazing growth in sales. I would guess the growth is due to social media, splitting the ‘G’, celebrity sippers, the Devonshire and, most importantly, the commitment of the Diageo team. I also think Guinness is being drunk more because it isn’t the most expensive pint on the bar anymore and the quality in the glass has improved vastly. Lager has taken the ‘expensive crown’ because of some unsustainable cost price increases since Covid.
One thing, however, for Guinness to consider is when pubs are running out of Guinness – because you cannot brew it quick enough – do not turn up and give it away at industry events… it left a bitter taste. Maybe hold your prices for a year and help pubs out to make up for it?
Here’s to a great year for all of us despite the challenges, open the hatches and celebrate the pub. Hopefully, the snow melts soon too.
