Beer Duty / Business rates / General / Taxation / VAT / 29 October 2018
Responding to the Chancellor’s Budget speech, Brigid Simmonds, Chief Executive of British Beer & Pub Association, said: “Pub-goers across the UK will be toasting the Chancellor tonight following his decision to freeze beer duty. This early Christmas present will save brewers, pubs and pub-goers £110 million and secure upwards of 3,000 jobs that would have been lost had beer duty gone up. “Clearly, the Chancellor has listened to the seven in 10 people in the UK who said they’d like to see beer duty cut or frozen in the Budget. Pubs are so important to their local communities and 82% of the beer we drink here is brewed in the UK. “This is a big step in the right direction and a huge help for pubs across the UK that are struggling. I hope we can continue to build on this success in the future and we will continue to celebrate the vital role that local pubs play in communities and highlight the ongoing pressures they face by supporting the Long Live The Local campaign. “The Chancellor’s announcement to cut business rates for high street and other small businesses is also great news for a lot of pubs. This will benefit community pubs by £120 million over the next two years, securing the viability of many locals across the country. We would urge the Chancellor to use the announced Digital Services tax to provide further support for all pubs large and small. “Furthermore, the Chancellor’s decision to announce a review of Small Brewer Relief is most welcome. “The announcement that the contribution by small businesses for the Apprenticeship Levy will decrease from 10% to 5% is also very good news for pubs. Likewise, so is the increase in investment allowance from £200,000 to £1 million. BBPA members invest over £200 million in their pubs each year. “These decisions are particularly welcome in light of the additional cost pressures facing pubs, such as increases in the national minimum wage and the previously announced increase in the climate change levy. “Overall, this has been a great Budget for pubs and pub-goers. Cheers Phil!”Read more
Brigid Simmonds | 10 May 2019
A version of this blog originally appeared in Propel Hospitality. I was asked to speak at an Inside Government conference this week on the next steps to revitalise the UK’s high streets while sharing best practice from four years of being a judge at the Great British High Street competition. In a week of so many policy announcements relating to the high street, the timing was perfect. Most significant of all, perhaps, was the government’s response to the Housing, Communities and Local Government Select Committee inquiry into high streets and town centres, which looked at alternatives to business rates. Inevitably the government’s response was robust, citing its warmly welcomed one-third reduction in business rates for businesses with a rental value of less than £51,000, worth £60m to the pub trade alone, while dismissing calls for alternative taxes to business rates to boost the high street. As ever, the British Beer & Pub Association continues to make the case for government to change the business rates system to support our high streets and especially pubs, which pay 2.8% of the total business rates bill yet equate for only 0.5% of turnover. That doesn’t mean, however, there isn’t other government support that pubs and the wider hospitality sector can make use of and I think we can agree it’s important to use all the help we can get. Last year, for example, the government appointed Sir John Timpson to chair an expert panel on the Great British high street. The panel’s report identified the importance of local leadership to boost high streets because no two towns are the same, they each have their own unique culture and heritage. As a result, the government is setting up a High Street Task Force with £9m of funding. Once up and running the task force will be a place for local leaders across the UK to access highly valuable support and guidance to regenerate their high streets and town centres. Furthermore, the chancellor’s decision to give £675m in funding for high streets in last year’s Budget was a huge boost. That funding will help improve infrastructure and access to our high streets, which in turn will see investment in them grow. Expressions of interest for phase one of the funding attracted 300 bids. It’s worth the pub and hospitality sectors seeing how they can become involved with such schemes. Local government is also a great source of support for our high streets and town centres, particularly where councils have the right skills and are prepared to invest. At the Inside Government conference, former councillor Graham Galpin spoke about Ashford Council’s £50m regeneration investment, which used data-driven insights to smarten Ashford’s high street and events and interactive experiences to drive footfall. The council is also developing a cinema complex and bought and refurbished a covered market it now offers to startups at low rents. This locally driven regeneration reiterates what I learned from the Great British High Street, where winners such as Bishops Waltham and Cowbridge exemplified how important local leadership is for high street and town centre regeneration. Of course the hospitality sector also has a key role to play in the regeneration of high streets. We should all do our bit to engage in schemes taking place across the country, particularly pubs, which sit at the heart of their communities and, in many cases, are the last public space on the high street. Are your managers or lessees looking to see how they can help? Is your local high street vibrant or could your community do more? Has it applied for the multitude of government funding available? We can all sit back, criticise public policy and find reasons why our high streets are failing, namely by blaming the government – but we can also play a part in helping our high streets. At the end of the day, local leadership is the key to local success.
Brigid Simmonds | 12 April 2019
A version of this blog originally appeared in Propel Hospitality. Last week was English Tourism Week. As a sector that directly and indirectly contributes £106bn in GDP and supports 2.6 million jobs, it was a fitting occasion to recognise the vital contribution tourism makes to the UK, both economically and culturally. The Tourism Alliance, which represents more than 50 trade associations crucial to England’s tourism offer, including the British Beer & Pub Association (BBPA), kicked off English Tourism Week with an annual conference I was privileged to attend. The highlight of the conference was hearing minister for tourism Michael Ellis speak so highly of the sector and the importance of investment in businesses that drive visitors to popular tourist destinations, whether staycationers or from overseas. Michael noted how the Discover England Fund has an important role to play in this, as do the Coastal Communities Fund and Future High Streets Fund, all showing the UK is open for business and a great place for tourists. On the day of yet another Brexit vote, it was fitting Michael emphasised how important our reputation for hospitality excellence is when attracting visitors from around the world. More significantly, Michael suggested we are close to getting a sector deal for tourism over the line. In a week that also saw a House of Lords Select Committee report recommend the government should press ahead with this deal, English Tourism Week was a good time to announce this. The perennial elephant in the room when it comes to tourism and hospitality businesses is, of course, business rates so it was fitting we held a panel session during the conference to discuss its impact. From pubs, restaurants and hotels to historic houses and leisure attractions – the businesses key to English tourism’s success story all require physical properties to operate and face an unfair business rate burden. Numbers surrounding the business rates that tourism and hospitality businesses face make uncomfortable reading. Following the 2017 rates revaluation, South West Tourism Alliance saw a rates increase of between 43% and 71% for professional self-caterers with more than 13 beds. BBPA research reveals pubs pay 2.7% of the entire business rates bill despite accounting for only 0.5% of business turnover. The current business rates system is clearly obsolete and needs a complete overhaul. The damage it is doing to our pubs and the wider hospitality sector – particularly when combined with other major tax burdens such as beer duty – is a huge concern for what is a crucial part of England’s tourism offer. At the end of English Tourism Week I settled down for a pub lunch with Mims Davies, minister for sport with responsibilities for gambling and tackling loneliness. At the Good Companions in Eastleigh, a wonderful example of an English pub, the struggle against the tax burden hospitality businesses such as pubs face felt real indeed. Dan and Claire, who lease the pub from Star Pubs & Bars, offer exceptional food and drink. Dan was recently elected to the board of the local Business Improvement District to ensure a vibrant but safe nightlife in Eastleigh – something that’s crucial for all tourist hot spots. Beyond this, Dan and Claire take part in various initiatives to help tackle loneliness in the community. Hospitality businesses including pubs such as the Good Companions are vital in driving economic growth through job creation and attracting visitors to an area to spend their money. Beyond this they also have a clear role in tackling loneliness, which is so important to our mental health and community cohesion. Cuts to business rates and beer duty would go a long way in helping pubs specifically but also supporting the hospitality sector as a whole and the vital role it plays in England’s tourism offer. A sector deal for tourism remains essential. Let’s hope the minister for tourism is right in saying it’s almost in our grasp.
Brigid Simmonds | 22 March 2019
A version of this blog originally appeared in Propel Hospitality This week, I had the privilege of attending a conference about Only a Pavement Away (OAPA) – an inspiring charity looking to help homeless people, ex-prisoners and vulnerable military veterans find work in hospitality. Greg Mangham set up OAPA after walking through Covent Garden one night with his wife, who commented that not all the homeless people they saw could possibly be unemployable. She challenged him to do something about it (!) and OAPA was born. OAPA’s ambition is to employ 500 homeless people in the hospitality industry within its first year. Greg’s mantra is that through employment people gain stability and if you find them the right job, they will be loyal for life. The name Only a Pavement Away comes from the fact that we are all just a pavement away from seeing homelessness and the crime and loneliness often associated with it on the streets. We are also just a pavement away from cafes, bars and hotels that are crying out for staff. The statistics surrounding homelessness and unemployment make for difficult reading. 12,000 offenders commit their first offence whilst homeless. On average there are 5,000 rough sleepers across the UK each night. 7% of the homeless are ex-service, 33% are ex-offenders. Offenders cost the tax payer on average £46,000. Average life expectancy on the streets is just 46 years old. 92% of service personnel leave the services in good health, but 48% of leavers are unemployed 6 months later. A third of prison leavers have no-where to stay when they leave prison (but say they do to ensure they are released). 25% of the population have a criminal record. Now just imagine what a difference we as hospitality businesses – whether it be pubs, bars, cafés or restaurants – could make if we opened our doors to this untapped talent pool? OAPA plays a key role in enabling this, by acting as conduit between charities like Crisis, Centre Point and The Clink, and hospitality businesses or sector representatives like ourselves. It helps overcome potential hurdles by ensuring that prospective employees come via a charity or association prepared to continue their support into employment. As Kate Nicholls rightly points out, the hospitality sector is faced with critical recruitment and retention challenges. I firmly believe it is schemes like OAPA that will help us make up the shortfall we face in talent, combined with our focus on wellbeing for employees, best in class employment packages and flexibility. The first movers who have taken on Only A Pavement Away candidates are already seeing the benefits. Abi Dunlop from Young and Co spoke passionately at the conference of the benefits their business has had from the scheme, which far outweigh the additional time and investment it took to get it up and running. The role of the charities in providing ongoing support to candidates is absolutely key according to Abi, but we as a sector need to keep our side of the bargain by showing candidates the opportunities we provide through OAPA. Of course, even more important than the talent pool OAPA opens up for our sector is the fact that it is helping vulnerable people in real need of support. Just how vulnerable some of the people in the OAPA network can be was illustrated by Ed Mitchell at the conference, a former journalist whose marriage had broken apart. This, combined with an alcohol problem, had resulted in him living on the streets. His story of how he came out of this situation with help from charities and OAPA was touching and a real inspiration for hospitality businesses to get involved in OAPA, although he was the first to admit that he still felt very vulnerable. Tim Foster of Yummy Pubs – another pub operator working with OAPA – summed it up best: the success stories of those who come from OAPA far outweigh the failures, and at the end of the day, people are at the core of our businesses, embracing them is vital. OAPA is certainly a charity we should all support. Many are doing so already and should be commended as such. Without doubt there will be challenges to make it work, but we all need to remember the brilliant employee we will have at the end and the wider benefits of providing vulnerable people stability and support through employment.
Brigid Simmonds | 15 March 2019
This article first appeared in the print edition of The Morning Advertiser The 4th to the 8th of March was National Apprenticeship Week 2019. Now in its twelfth year, National Apprenticeship Week offers both an opportunity to celebrate our fantastic apprenticeship schemes, but also promote their importance to pubs and the wider hospitality sector. I am one of the many advocates of apprenticeships. I did not go to university myself and after working in the hospitality sector for the best part of 25 years I have met, know and admire many people for whom the apprenticeship route into employment – or during their employment – opened the doors to an exciting and rewarding career in a pub or other hospitality business. It is one of our sectors best kept secrets that you can be running an exciting business at, or even before, the age of 25. For entrepreneurs who enjoy working with people, it simply offers one of the best possible careers out there. The success of apprenticeship schemes is in part down to sectors like our own leading the way in embracing them. It is also essential, however, that everyone across Government and in educational establishments recognises the apprenticeship route into employment, so they are not seen as second best to university degrees. The Hospitality Showcase event on apprenticeships hosted in Parliament during National Apprenticeship Week is exactly what industries across the UK should be doing to promote apprenticeships. I was proud to see so many pubs and brewers at the showcase event, demonstrating the enormous breadth of training and apprenticeships we offer. The Leisure PR team did a fantastic job to encourage thirty organisations to set up stands in the House of Commons. Pubs alone employ around 600,000 people and there is a real need for us to attract and retain great employees who inspire customers to come to our venues and be so impressed that they return for more, again and again. Apprenticeships have a key role to play in this and in hospitality and catering there are currently 14 different apprenticeships standards, from bar supervisor to commis chef. Between 2013 and 2018, 165,000 people started apprenticeships in hospitality and catering – many of them in pubs. As we prepare to leave the EU, we may start to see some challenges in recruiting overseas workers. We must start attracting even more UK talent to work in our pubs, but with almost full employment that’s not going to be easy. It’s clear to me that as an industry we need to do more to convince people of the future of pubs and hospitality and the great careers they can provide. Continuing our great work with apprenticeships and promoting our careers in schools and colleges is key achieving this.
Paul Oakley | 08 October 2018
With the nation gripped with ‘football fever’ as Gareth Southgate and the England team rekindled the nation’s love affair with its favourite sport as well as the hottest summer on record for 40 years, breweries and pubs across the nation worked tirelessly to meet the demand of thirsty punters. BBPA predicted that England reaching the semi-finals would boost the beer trade by an extra 40 million pints. However, even the optimists among us wouldn’t have predicted the results for the industry. Perhaps it was the soaring temperatures, or maybe the new trend to throw pints in the air in celebration (and with the number of goals England scored against Panama in the Group stage, this could well be the case), but ‘football fever’ led to an increase in 130 million more pints this Summer (June to August) than the same period the year before according to the BBPA’s Sales Volume Survey of its members. To put this into perspective, that is enough beer to fill 30 Olympic sized swimming pools or half a million bath tubs. Not only is this a significant boost to the beer industry, but the UK economy no doubt benefited as well. BBPA estimates this to be an additional £390 million to GDP, as well as a £71 million contribution in taxes through beer duty, as well as another £37 million in VAT. Speaking to our members highlighted the undoubtable benefits of tournaments such as this. Julian Momen, MD, Carlsberg UK “Taken together, this lovely British summer with England’s creditable performance in the World Cup has been a rare treat; one that’s worked wonders for the beer category. Good for UK brewers, good for stores and good for the great British Pub. But most importantly, good for the beer drinkers across the UK, regular or new, who have been able to enjoy an ice cold lager or maybe a hoppy craft IPA - out in sun, at the BBQ, or watching the footy on the big screen.” Heydon Mizon, Joint Managing Director, McMullen & Sons “The world cup was a tremendous event for our more wet led pubs. Belief in the English team was perhaps initially lacking but as confidence grew so did the positive atmosphere and sales with many sites setting a new sales record for the day. We loved each goal as guests seemed to enjoy dispensing their beer into the air in celebration, which is certainly something we wish to encourage." Tom Davies, Chief Executive, Brakspear “It’s been a summer to remember across the Brakspear estate. Our lovely riverside home town, Henley-on-Thames, has been at its very best in the sunshine, and our many rural pubs with gardens have been packed with thirsty customers enjoying the weather. The success of the England team in the World Cup did take a few pubs by surprise and many who’d not planned to show it changed their minds as the home team kept winning! All in all, these have been ideal trading conditions for the majority of our pubs and we could certainly get used it!” Hearing from pub owners also demonstrated the outstanding benefits of the World Cup and the hot summer for pubs. Paul Williams, the Duke of Wellington, Twyford The Duke of Wellington can only hold around 80 people inside and in previous World Cups this was a barrier. This time round, Paul transformed his pub’s car park into a temporary garden with a large outdoor screen. The total cost for this transformation amounted to £1,900, but after promoting the changes on social media the investment paid off. “Trade was up significantly. On a normal weekday we night take £1,000 but during England games we were hitting £6,000”. Not only did it boost profits on the England games but Paul reported the longer term positive effects of the tournament, particularly that it has significantly helped to market the pub generally as well as introducing to new customers. “We now attract customers from a wider area and continue to use the outside screen when weather permits for Premier League games. We’ve had an overall increase in trade since the World Cup with many new faces enjoying the atmosphere and vibe of our pub.” “We have a great drinks offering and good support from Brakspear too, but we’ve thrived on the events side. Putting experience of that and other businesses we’ve run previously is how we’ve grown trade. It’s the understanding of your community that I think is key to any offering.” Paul is looking forward to benefit from future sporting events such as the next big boxing match in September which will benefit from the outdoor screen area, as well as community sporting events such as hosting events for darts teams, cribbage and their sponsored football team. Simon Chudley, the London Inn, Okehampton When speaking with Simon, the owner of a freehold pub with a niche sports offering, he explained that he was not anticipating the World Cup. Prior to the tournament, he did not do any specific promotions for the tournament as he was already known by locals as the sports pub. Simon installed a 16ft screen in the pub’s function room, doubling the area which customers can fit into, and the impact was outstanding. “The first game was a bit slow, but as the enthusiasm grew with England’s success, our sales took off and the pub filled more and more with each game. Over the month, drinks sales were up 200% on the previous June”. Simon reported that during the England vs. Colombia match, his profits were the same as they would be in a week. Simon discussed the long term effects of the World Cup. “Not only were sales up during the tournament itself, but the hot weather has continued to drive high profits, with a number of new returning customers wanting to drink in the garden. There has also been an influx of people coming to the pub after work to enjoy the weather”. Simon is looking forward to the rest of the year, the new season of football, the Six Nations rugby and England rugby’s international games.
Paul Oakley | 25 July 2018
Forty-seven companies contributed to this year’s Annual Barrelage Survey, the industry’s definitive measure of the UK beer market. The headline result being that beer sales were 0.7% higher in 2017 compared to the previous year. As usual the tables and report are free to all members of the BBPA, if you would like to receive a copy then please contact me. But non-members don’t need to be too concerned - the report is available in our shop here. So just how much beer was sold? In total, Brits enjoyed over 7.75 billion pints of the nation’s favourite drink, that’s 21.2 million pints every single day. Or to put it another way 28.9 million kegs plus 4.9 million casks plus 3.2 billion cans plus 3.3 billion bottles. Or 1,762 Olympic swimming pools! So what insights can we gauge from the report? Here are three interesting insights that paint us a picture of the world of beer in 2017. Pubs are under increasing pressure The long term trend seeing people favour a beer at home over their local has continued. 53.1% of beer sold in the UK was sold through the off trade in 2017, the highest this figure has ever been. Of course there are many social factors driving this trend. The home is a very different place than it was in 2000 due to improvements in home technology. People also tend to have less leisure time than they used to, as well as the rise of social media which means you no longer need to leave your house to see friends. However, what is surely the biggest driver is the rapid increase in the price of a pint in pubs. In fact, in the last ten years, the price of beer in the on trade has increased by 28.6%. This compares with an increase of 8.5% in the off trade. Pub-specific cost pressures like business rates, which sees pubs pay an unfair burden of the total high street bill. As well as the National Living Wage and VAT means it looks likely that this worrying trend will continue into the future. Pubs are also reeling from crippling duty increases of over 42% between 2008 and 2012. Three cuts and a freeze had relieved some pressure on pubs since then but last year’s 3.9% hike has increased the challenge further. Draught Ale innovation Back in 2000 Nitro Keg Ale was the most popular style of keg ale with 42.2% market share. Fast forward to 2017, Nitro Keg Ale volumes have fallen 69.2%. Contrast this with Cask Ale which has been relatively resilient to market pressures over the same period and now comprises 57.9% of the market for draught ale. However, in 2017 it is Traditional Keg Ale which is the category in growth with volumes increasing by 9.6% last year. There is certainly a large appetite for draught ale currently and this “new wave” of keg beers is being driven by new tastes in the market but also through innovation by new and existing brewers. Changing tastes are always difficult to predict and it will be interesting to see if this continues in future years. The rise of No and Low Alcohol Beers No and Low Alcohol Beers have always been of interest to consumers and industry alike, however sales remained stagnant for a long time. Since 2013 we have observed an exponential rise in sales of these beers. In fact, in 2017 alone volumes increased by 25.9% while volumes have grown by a staggering 150% in the last four years. No and Low still only account for 0.5% of the market however so there is room for even more growth. Whether this trend is driven by demand for a healthier alternative or an improved supply of quality products through brewing innovations we welcome this interesting trend.