February 22, 2018
A look back to move forward
What did 2017 have to offer the pub trade?
As the first month of 2018 drew to a close, the pub industry breathed a sigh of relief. A freeze on alcohol duty and the news that fewer pubs are closing each month has brought a feeling of optimism to the trade as more diversify into coffee shops and even Post Offices to keep the punters coming.
But there will be a busy year ahead as Brexit looms, a new industry award gathers steam and landlord struggles with a dip in hospitality recruitment to be contended with.
So here we recap on 2017 and the issues that made the news.
Hammond froze alcohol duty and gave £1,000 rate rebate to those pubs that qualified believed to be 90% of pubs.
In March the Chancellor, Phillip Hammond, announced that he would be increasing beer duty by 2p a pint but in his November budget, the public earned a reprieve as he shared the good news with all beer drinkers and froze beer and alcohol duty.
From April 2018 business rates will be calculated using the lower Consumer Price Index (CPI) instead of the Retail Price Index (RPI), "worth £2.3b to business over the next five years", and future business rate revaluations will take place every three years instead of every five.
The news was a great Christmas present for many as is it estimated that it would save pub goers £117 million pounds in 2018 but would cost the government £1.2 billion by 2023. The best news that came from is that it would secure over 3000 jobs in pubs and beer suppliers in the UK. More on this in 2018.
BBPA outlines 5-year plan
In the summer of 2017, people across the UK took to the polls after the Prime Minister Teresa May called a snap general election. But it was the British Beer and Pub Association (BBPA) that urged all political parties to back their policies that they thought would unlock growth and encourage investment in British beer and pubs across the UK.
In May the BPPA published a manifesto that outlined their priorities to help build on the reputation of the industry over the next five years. The key parts of the manifesto focused on the need for government to tackle high rates of UK beer taxation as well as on calls for a more competitive tax that would encourage pub goers to drink lower strength drinks, which in turn would support British Pub, promote innovation and choice for consumers.
The best outcome for the pub and beer industry as the government continues to negotiate the Brexit deal is a free trade deal and more government support in exporting beer to the EU.
Although better government support of the industry is vital for its survival the BBPA want to see more investment and training and access to those with the right skills from across the European Union.
Apprenticeship recognition for Greene King
In December 2017 our client Greene King won the 'Best Apprenticeship Programmed in the Training Journal Awards which celebrates the best in learning and development practices. Greene King's apprenticeship programme started in 2011 and has seen 9,000 apprentices completed the programme over the past six years.
Community boozers develop and grow with help from Admiral
With the rise in the number of community pubs across the country, the Board of Admiral Taverns, the UK's number one community pub group, announced that it reached an agreement with Proprium Capital Partners and C&C Group plc to become partners with Admiral management.
The Admiral management team will continue to lead the business. Over the past five years, they have developed almost 850 pubs that are now at the heart of their communities.
So, what does 2018 hold in store for pubs and bars?
Duties and taxes expected to rise this year
Although Hammond said he was, "Backing our Great British pubs" by freezing duty on ciders, wines, beers and spirits. Duty on low-quality, high-strength alcohol are set to go up in 2019 which means that prices could continue to rise in the autumn budget.
Mr Hammond said:
"Excessive alcohol consumption by the most vulnerable people is all too often through cheap, high strength, low-quality products - especially so-called white ciders.
And so, following our recent consultation we will legislate to increase duty on these products from 2019."
The duty freeze was welcomed by The Association of Licensed Multiple Retailers (ALMR), who said that the move could save the sector around £116 million.
Jobs in hospitality become worryingly low due to fears around Brexit
While the freeze on alcohol duty has been estimated to save around 3,000 jobs in pubs and beer suppliers, the hospitality side of things is a very different story.
Pub owners say their businesses are under threat because too few people are applying for chef, bar staff and kitchen porter jobs. The British Hospitality Association has revealed there is a 60,000-person shortfall in the industry across the UK. In a report commissioned by the BHA from KPMG, 'Labour Migration in the Hospitality Sector' points out that the hospitality sector is "highly reliant" on EU national workers, with up to 24 percent of the sector's workforce made up of EU migrants. It says that the labour shortfall 10 years after Brexit would be 1 million if EU migration fell to zero from 2019.
The research for this report focuses on hospitality where currently 3 million people are employed. The BHA also represents tourism and estimates that there are 4.5 million workers employed across hospitality and tourism as a whole, the fourth largest industry in the UK contributing 10 percent of GDP. The report points out that when taking both hospitality and tourism together, the recruitment gap would be even greater.
The KPMG report says that 75 percent of waiters and waitresses, 25 percent of chefs and 37 percent of housekeeping staff are from the EU.
Free e-learning now available in Star pubs
Star Pubs and Bars are launching a free Disciplinary Procedures E-Learning course for its licensees to help them ensure they have the correct processes in place. The move follows the scrapping of employment tribunal fees for employees at the end of July this year. The number of employment tribunals fell by 70% when fees were introduced in 2013 and it is anticipated that cases could now increase. Star's E-learning module is a step-by-step guide to implementing correct disciplinary and grievance procedures to prevent staff issues escalating to tribunals.
Michael Soderquest, Star Pubs & Bars Lessee Capability Manager, said: "When it comes to handling disciplinary meetings and grievances, it is crucial to follow correct procedures as not to do so can have major implications. Being taken to an employment tribunal is time-consuming, costly and stressful as well as disruptive to a pub's whole staff team."
The module is the latest free E-learning content that Star has created for licensees. The company introduced free E-learning earlier in 2017. Other modules cover starting a leased pub business, pub financials and pint perfection, with Star looking to build on these with more topics being added over time.
Minimum wage went up
The Chancellor confirmed a rise in the National Living Wage - which is set to jump to £7.83 an hour, on 1 April 2018. This is the hourly rate paid to over-25-year-old workers - it currently sits at £7.50.
Philip Hammond, who made the announcement during the Autumn Budget, said, "This is an increase of 4.7% - the rise would leave full-time workers on basic pay as much as £600 better off a year, equivalent to £50 a month - or 33p extra an hour. "
The minimum wage for younger workers is also set to rise - with pay for apprentices going up by 20p an hour.
Hammond's increase in the minimum wage is linked to the Tories' pledge to deliver a rate of £9-an-hour for over 25s by 2025.
However, this is still below the Living Wage the pay rate recommended by the non-government campaign that proposes an hourly rate, based on inflation and living costs.