Pub owners kept ‘awake at night’ by imminent cut in energy bill support

Hospitality operators have said they are suffering sleepless nights ahead of the imminent cut in energy bill support as industry trade bodies warn some pubs are “days away from failure”.

On Saturday (1 April), the government’s energy support scheme for businesses will end and operators will instead be eligible for a smaller discount under the new Energy Bills Discount Scheme.

Adrianne Mead, who has been the licensee of the Royal Oak in Isleworth for almost eight years, said her energy bills now exceed £100,000-a-year after she was forced to take a 12-month contract in September 2022, when prices were especially high.

She said: “The threat to the survival of our business has now reached a critical level, with our energy costs tripling.

“The stress we are feeling as a business is keeping us awake at night, putting an immense strain on our everyday lives. We have cut our usage as much as we can.”

Joanne Farrell, who has run the Windsor Castle pub near Stockport for 15 years, said: “When energy costs rocketed my bills went up threefold. The end of the support will see them rise even further.”

The British Beer and Pub Association (BBPA) warned that average energy bills for a pub after 1 April are expected to increase by £18,400 a year.

Gabriel Waterhouse, executive head chef and owner of the Waterhouse Project in London’s Bethnal Green, is concerned that his fixed-rate contract will end in September when government support will be lower.

He told The Caterer: “It sounds like [the renewal] is going to at least double, which is quite a significant increase even in the best-case scenario. It’s a never-ending cycle at the moment. We’ve got to be very clever; everything costs more than it used to.”

Waterhouse has had to increase prices for his tasting menu by 10% and has charged an extra £20 a head over the past six months to alleviate some of the impact from energy price rises.

Speaking at Hotel, Restaurant & Catering show in London last week, Craig Lowrey, principal consultant at energy specialist Cornwall Insight, warned higher energy bills were likely to be an “enduring change”.

He said that energy suppliers may continue to impose excess security deposits or harsher payment terms on restaurants, bars, and hotels as “hospitality is one of the sectors that has been hardest hit from fears of the sector as a whole... Anecdotally, it’s still in suppliers’ minds that you are contracting with a business at a disproportionately high risk to someone else.”

It comes as Steve Alton, chief executive of the British Institute of Innkeeping (BII), warned that independent pubs across the country were “days away” from failure as the Energy Bills Discount Scheme would provide “almost no relief” to licensees, many of whom had seen their bills quadruple since 2021.

The BII sent an open letter to Ofgem on 23 March, which stated that the review into bad practice by energy suppliers is “critically urgent” and had “already taken too long”.