19 May 2022

Opinion from Adrian Leopard & Co

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Pubs on the biggest rollercoaster during the pandemic
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Pubs on the biggest rollercoaster during the pandemic

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Anyone in business has ups and downs but current events have vastly exceeded the norm

We have talked about rollercoasters on a number of occasions now as we see things see-saw up and down. Of course rollercoasters are supposed to be fun but unfortunately the range of goods and bads we have seen over the past nine months have been far from fun.

Of good news, however, it is reported that the government would like to ditch the rule about eating a substantial meal when pubs eventually get to re-open. This was a rather controversial move because the logic of it was not really clear but it certainly proved controversial in relation to pubs which did not have catering facilities – so they were forced to close. Happily it looks like this will change but probably the rule about being seated at tables will not. At least the debate about whether a scotch egg constitutes a substantial meal or not will become a thing of the past.

This move will definitely enable wet-only public houses to re-open their doors although there must still be the caveat that management will need to be very careful to ensure that the self-distancing rules continue to be observed whilst they remain in force.

But that is probably where the good news ends. There is no date yet as to when pubs can re-open but the fact that there is mention of it at least means that the prospect in under consideration in the road-map back to normality.

One of the problems is that furlough is not actually seen as quite the elixir of life that businesses would like. The contribution to wages by employers is pretty high and the irony is that it appears that more is received by government in national insurance payments than is actually contributed to the scheme. Forgive me, but I am not sure that that sounds like a beneficial scheme at all - other than for government that is!

More bad news – a computation has now been made of how much beer will be thrown away during the lockdowns. The result is the stunning total of 87 million pints. All that beer down the drain; what a terrible waste. And who is paying? Well where the beer goes back to the brewery for disposal, at least the taxes are refunded. The duty per pint in England and Wales is circa 54p so that means the government has suffered a loss of £47 million. Higher gravity beers have a higher rate of duty. Don’t forget that when you buy a pint of beer you pay VAT as well on the duty so your 54p becomes 65p.

As to the rest, that is probably a matter of whose beer it is. If it has already been sold and delivered to the pub, then unless the brewery is being very generous, the pubs stands the loss. The brewery will stand the loss of the beer which remains in its vats pending sale. Having said that, the brewery will only pay the duty when the beer is actually sold. Either way it is not a bill anyone wants to be picking up and perhaps breweries will be more cautious about making beer in future if they think that further restrictions could be made on opening.

Is there better news ahead? Well the hospitality industry would apparently like to see the introduction of the Eat Out to Help Out scheme again as it was felt that this was a great help and data produced by the Treasury has indicated that the scheme was not believed to have contributed to a rise in covid-19 cases. No hint of this has been given by the chancellor but people live in hopes. Another thing the hospitality industry would like to see is the continuation of the 5% rate of VAT. Indeed it would bring the UK into line with much of Europe if rates of VAT on hotel accommodation and meals were maintained at a lower rate.

Finally the continuance of rates relief would also be a great help as commercial rates are really very high.

In the meanwhile, however, it remains a case of sit it out and hopefully watch the number of new cases slowly drop and the number of vaccinations quickly rise. Let’s hope that the hospitality industry will still be in one piece when it gets back into operation.

Adrian Leopard 05-02-21

Photo Stephen Hateley

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Adrian Leopard & Company is the trading name of Alderney Offshore Ltd, a company registered in Alderney, Channel Islands number 1220.

Address P O Box 1027, Alderney GY9 3AS

Registered Office Seldomin, Longis Road, Alderney GY9 3YB.

Adrian Leopard & Co is represented in the UK by 3CL (UK) Ltd trading as Adrian Leopard Associates.

Telephone enquiries may be made on 08449-4-08449 or 01684-230360.

E Mail [email protected]

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