Coronavirus: Will the pub trade survive the lockdown?

Ken Lavender, a veteran of the pub trade, has no idea what the future holds.

Ken and Mary Lavender keep The Crown at Claverley
Ken and Mary Lavender keep The Crown at Claverley

"It's soul destroying," he says. "I have been in the trade for 43 years, but I have never known anything like this before."

When he took on the lease of The Crown at Claverley in December, it seemed like a dream come true. The 60-year-old first worked at the picturesque timber-framed pub in the idyllic village 35 years ago, helping to tend the bar when the landlord was away. Two years ago, he returned to the pub as manager following a major restoration, so when the opportunity to become the landlord arose just before Christmas, it seemed an opportunity too good to turn down.

But five months on, he is wondering if the enforced closure as a result of the coronavirus outbreak could mean his tenure is shortlived.

"I don't want to go from here, I love Claverley," he says. "Hopefully we will get the backing we need, but it's impossible to say what is going to happen because nothing like this has ever happened before.

"But I've not been able to open, and I've still got bills to pay."

As an experienced licensee running a popular pub with a loyal customer base, Ken is in a stronger position than many to weather the storm.

But for an industry which had long been in the doldrums, there are fears that a prolonged period of closure could tip many of them over the edge.

Nik Antona is chairman of the Campaign For Real Ale (Camra), which has been fighting to halt the rate of pub closures for many years. Before lockdown, pubs were closing at a rate of about 14 a week, and Mr Antona says the events of the past few weeks are bound to have an impact.

"It's likely we will see more pubs go," he says.

Among those at greatest risk, Mr Antona says, are those owned by the major pub companies, which are then leased to tenants with a contract to buy drinks from the owner of the building.

"A lot of them are unfortunately being billed to pay their leaseholders, even though they cannot open, and that is going to be a problem," he says.

"Some of them are being allowed to defer their payments while they are closed, but that will mean when those pubs re-open, they will be hit with a big bill for the rent."

Camra has been lobbying the chief executives of the 'big six' pub companies to stop charging their tenants rent during the enforced period of closure.

The organisation's national director, Ben Wilkinson, says pub companies have long argued that rent paid by their tenants should be based on turnover.

"When pubs are closed, they have no turnover – so, based on the pub companies’ own preferred rationale, there should be no rent due," he says.

The pubs best equipped to survive the storm will be those which are owned by breweries that employ managers to run them.

"They will have taken advantage of the Government support that is available, and put all their staff on furlough," he says. "They will likely be able to reopen as normal at the end of it all."

But according to the British Beer and Pub Association, however, there are also concerns about the time taken for the government support to actually reach the pubs.

Emma McClarkin, chief executive of the British Beer and Pub Association, says there are 10,000 pubs still without any grant support because they are above the £51,000 rateable value threshold.

"Unless that is abolished immediately, many of those pubs will cease to exist in a matter of weeks putting some 150,000 jobs at risk," she warns.

“Not only are these pubs viable businesses, they are the social hub that binds us together. The Government has got to get its support right and delivered so when this crisis is over pubs can re-open and serve their communities once more.”

Kate Nicholls, chief executive of UK Hospitality, agrees.

“The package of support that the Government has announced is very generous," she says. "Unfortunately, the delivery of that support has been far too slow, and businesses cannot wait any longer."

She is also called for an end to the £51,000 rateable value threshold, which meant pubs valued above that are not eligible for grant support.

"These businesses may be in more expensive buildings, but they are being hit just as hard as others. There is also the danger that jobs will be lost in much larger numbers if these bigger employers fail. That is why they need support, too."

Mr Antona is hopeful that when the pubs do reopen, there will be an initial surge of support from customers keen to go back to their locals once more. But in the longer term, he says much will depend on the profile of the customers themselves.

"Pubs in the villages and communities of Shropshire, Staffordshire and the West Midlands have their own local clientele who will go and support that pub, in many places they are the only community facility in that area, and they will come back to those pubs," he says. "But those who have enjoyed sitting at home having a drink will continue to do that."

The latter is something which concerns Ken Lavender, who points out that while the pubs have been forced to close, the supermarkets have still been able to carry on selling beers, wines and spirits.

Mr Antona believes many of the pub closures will be temporary, with new tenants eventually coming along to reopen them. He says some pub companies may try to offload their less profitable properties by converting them into supermarkets or housing, but he says tighter planning laws now make this more difficult.

Steven Alton, chief executive of the British Institute for Innkeeping, says it is vital for the long-term wellbeing of the nation that the industry gets all the support it needs

“When we recover from the current crisis, pubs and their teams will play a critical role in reconnecting our communities," he says.

"To safeguard their future, pubs of all sizes need immediate financial help.”

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