UK: Pubs closing at rate of 52 a week

The rate of pub closures is accelerating, with 52 going out of business every week at a cost of 24,000 jobs over the past year, figures show.

Almost 2,400 pubs and bars have vanished from villages and towns in the past 12 months, according to research for the British Beer & Pub Association (BBPA). Local pubs serving small communities have been the worst hit, the association said.

The number of closures represents the steepest rate of decline since records began in 1990 and has risen by a third compared with the same period last year, when 36 pubs were closing every week.

A preference for drinking more cheaply at home, rather than going out, is thought to have contributed to closures. A BBPA spokesman said: “The biggest impact is the recession. There are fewer people out and fewer people spending money in pubs and bars. Pubs are diversifying but, unfortunately, if you are a community pub you can’t transform yourself into a trendy town centre bar.”

The BBPA said that the total number of pubs and bars has fallen from a steady 60,000 “for years” to the 53,466 still trading. It added that of the 52 premises closing each week, 40 are local pubs and nine are high street bars. The recession is claiming about 461 bar jobs a week, according to the figures, compiled by CGA Strategy, the market information group.

The BBPA said that establishments that serve foods, such as gastropubs, were more resilient, closing at a rate of only one a week. By contrast, branded pubs and café-style bars are faring relatively well and are opening at a rate of two every seven days.

The fall in spending in pubs and bars is the latest in a string of setbacks for publicans in recent years. Inflationary pressures cut drinkers’ spending power in 2007, resulting in a drop in revenue. The smoking ban in 2007 and changes to the licensing laws have dealt further blows.

The BBPA said that higher taxes on beer imposed in the past two Budgets had contributed to the industry’s woes, adding about £600 million to the pub industry’s tax bill.

In addition, some of the larger pub companies, such as Punch Taverns and Enterprise Inns, have come under scrutiny this year, with an investigation by the Commons Business and Enterprise Committee into their tied-trade business models. The committee said in May that it had found evidence that the behaviour of such companies was contributing to the sharp rise in pub closures.

The BBPA said that the closure of pubs had cost the Government an estimated £254 million in tax revenue in the past 12 months — a figure rising by £5.5 million every week. It added that job losses in the sector were costing the Government £1.53 million a week in jobseeker’s allowance.

David Long, the chief executive of the BBPA, said: “Closing pubs are not only a loss to communities, but a loss to the Treasury. The Government should look at valuing and rewarding pubs as community assets. Not only would this have social policy benefits by supporting a hub of community cohesion, but financial policy benefits in terms of tax revenues, particularly at a time when the public purse is stretched.”

The BBPA said that, in the past, closed pubs had often been bought by property developers and turned into flats, but that since the decline of the property market, pubs that had shut had less appeal to prospective buyers and had been left boarded up. A spokesman for the association said: “While some have been bought by other people — usually property developers rather than new landlords — since the downturn, pubs have become a lot less attractive to developers.”

Estate agents said that pubs in villages, where local housing is in short supply, still made a compelling case for developers. Chris Coleman-Smith, head of auctions for Savills, said: “If it is in the back of beyond, where a pub might struggle for trade, it is probably better off as a residential development, either a house or a few units, for prospective homebuyers.”

July 22, 2009
Rebecca O’Connor

Source: The Times

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