Once upon a time if you ran a pub it was a profitable business to be in. The rents were reasonable, the margins good and the lifestyle a good one. Sadly things are not what they where. The continued hike in tax on beer, together with the deregulation of brewery owned pubs has lead to a free fall in the viability of most pubs. After deregulation and the scramble for pub estates by companies who knew nothing about the beer trade the inevitable rent rises began.
Pub estates are now viewed as property portfolios. The pub chain is not solely interested in beer sales as such but more the high rent revenues generated by their estates. Because of these factors there has been a huge turnover of tenants over recent years, with people finding it impossible to make a living. The seemingly never-ending line of people wanting to live the dream and run their own pub is now drying up. Where once taking on a pub as a business was a good idea, now the penny has dropped and most prospective landlords realise that it is a quick way of going broke.
Every five years all commercial properties are revalued to take into account shifts in value between UK regions and different market sectors. The revaluation for pubs and all other categories of property must be based, by law, on rental values at 1 April 2008 – for pubs this reflects expectations of trade at that date and bears no relation to the actual performance of a business. This might explain why the average pub’s rateable value has increased by 23%.
Information collected on actual rents and turnovers was collated before the smoking ban in 2007 which decreased pub turnovers dramatically.
38% of British pub goers are smokers and account for 49% of an average pub’s income
This figure comes from Harris International Marketing and is based, I believe, on a sample of 4038 pubs. CR Consulting's analysis revealed a striking correlation in the rate of closures in England, Scotland and Wales following their respective smoking bans. Previously, the different start times of the ban had obscured the similarity of the decline across Britain, causing observers to blame other reasons for pubs closing - e.g. the recession, duty hikes, supermarket booze, the tie, etc.
When the ban was first introduced in July 2007, amid claims by health campaigners that smoke-free would attract more drinkers into pubs, tax inspectors said that the new law would not represent a material change in either direction to their trading position. As a result of the initial flawed advice, the Government's Valuation Office Agency (VOA) refused to give pubs any rate reduction for loss of business. The Conservatives have now accused ministers of "ripping off" of pubs and "covering up" vital information that could stop locals going out of business. Currently four are closing every day according to the British Beer & Pub Association (BBPA).
The future of the pub does not look good. Certainly there will always be pubs that will survive, but equally certainly there are a vast number that will not, which is sad for us all. High taxes and greed have condemned the great British pub to a slow death.Surely it cannot be all gloom and doom; maybe it just feels that way. How sad to see so many pubs closing down or changing use.
It is only when a pub that has meant something to us personally closes down that we feel particularly sad. The pub where you had your first underage pint, and perhaps the place you met the love of your life, is now an empty building plot or worse. All those good laughs, darts games, heated footy arguments and happy times, gone forever. As the old saying goes " We Don’t know what we’ve got until it is gone"
In memory of The Coventry Arms, The Globe, The Horse an Groom, The Bell, The Allens Club, The Engine & Tender, The Nags Head, Dom Polski, The Greyfriars, The Commercial Tavern, The Old English Gentlemen, The Woolpack, The Windsor, The Saracens Head, Yates, The Lincoln Arms, The Crown (harpur st), The Dew Drop Inn, The Century, Pitchers Wine Bar, Porters Black, Fleur De Lys, The New Inn, Matt's Place, The Queens Head (kempston)The Bricklayers Arm's, The Crown (brittania road), The Pool Cabin, The Venue & Prince's Wine Bar