Pub sector in a critical condition claims report


Pub Restaurant Advisor claims that with 50 locals closing every week, Britain’s hard-up pub trade has become one of the most distressed sectors in the country.

Figures released by insolvency specialist  Begbies Traynor showed a 95% rise in ‘critical’ financial problems in the pub sector since the beginning of the year, making the sector the hardest hit of any type of business in the first quarter of the year.

The report classifies problems as ‘critical’ when a company has debt-related county court judgments (CCJ) worth £5,000 or more.

The numbers are stark when compared to the 7% fall on average in critical distress levels across all business sectors, and a significant drop among manufacturing firms.

“Duty increases are hitting pubs particularly badly, and a survey out today suggests in the first quarter of the year, the consumption in pubs was down by 57 million pints and at the same time there was an almost equivalent increase in terms of drinks spending in supermarkets,” Begbies Traynor’s Julie Palmer told Sky News.

The company said many pubs were unable to keep up with changes in consumer behaviour which has resulted in more at-home drinking by increasingly less affluent young people and students, once the staple customer of pubs and bars.

Ms Palmer added that industries that depend on discretionary spending from hard-pressed consumers were suffering, raising concerns that the withering of the local pub trade will have a damaging impact on Britain’s communities.

“The fact that pubs, football and other sports clubs are on their uppers is not simply a matter for economic concern, as these once thriving hubs of community and regional identity are part of the fabric of British society, and once lost can never be replaced,” chairman Ric Traynor said.

“Whether you view that as a good or a bad thing, the fact is it will, in the long term, change the character of the country as a whole and this should be recognised.”

The high number of closures has prompted Camra, the Campaign for Real Ale, to launch an initiative to re-establish the pub at the centre of community life and persuade landlords around the country to look at different ways to attract new customers.

But Begbies’ quarterly review found the overall situation for businesses was beginning to improve, boosted by the uplift in the manufacturing sector.

“Distress levels year-on-year are actually down about 17% at the moment, which shows there is some good sentiment in the economy in the sense that business are ready to start recovering,” Ms Palmer said.

Firms involved in food and beverage manufacturing reported less financial trouble and even the printing and packaging sector performed better than previously.

However, the firm added that significant problems in the property services, construction and utilities contractor sectors in the past quarter indicate that while the private sector has surfaced from the depths of the economic turmoil, public spending cuts are still hitting many companies hard as long-term infrastructure and construction contracts are held over or shelved.


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