The boss of an independent beer brewery has warned that cutting energy support for businesses during the cost of living crisis could result in customers having to pay more than £10 for a pint at pubs and bars.
Charlene Lyons, chief executive of Black Sheep Brewery, insisted 'we’ve got to be really careful about price increases' after the Government announced it would be ending its energy bills support for the hospitality industry at the end of March.
Speaking to BBC Radio 4’s Today programme on Tuesday morning, Ms Lyons said: “If we were to push all of the price increase over to the consumer, across the board, whether it be energy and everything else, input costs of raw materials… you’d be talking about over £10 a pint which is clearly not sustainable.”
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Another hospitality boss, Tayub Amjad, owner of the Zouk restaurant in Manchester, said his energy bill was set to soar by £150,000 a year when the current scheme ends, reports the Evening Standard.
The current energy support scheme for businesses, which costs the Government £18 billion, caps the price of electricity and gas for businesses, charities, schools and hospitals at £211 per megawatt hour and £75 per MWh.
In April, the price caps will be replaced with discounts of £19.61 per MWh for electricity and £6.97 per MWh for gas when wholesale prices surpass the level of £302 per MWh for electricity and £107 per MWh for gas.
Chancellor of the Exchequer Jeremy Hunt said continuing the current scheme was unsustainable but that the new support package, which will run until next April, will provide firms with greater certainty.
On its website the Government said that under the old scheme a pub that uses 16 MWh of gas and 4 MWh of electricity each month could have been given around £3,100 per month in support. Under the new scheme the same pub will get just £190 per month.
But business groups and hospitality bosses believe the new scheme will leave many smaller firms with no choice but to pass on rising costs to consumers.
Asked about the new Government support scheme, Ms Lyons added: “I think on balance it’s fairly disappointing. I think as a brewery we benefit because we are high level but our pubs clearly miss out massively.
“Energy prices will still absolutely soar for us and everybody else as well. You’re talking about the best part of £200,000 per annum and that’s not sustainable for many businesses. including our own.”
The Government is hoping that wholesale gas prices, which spiked following Russia’s invasion of Ukraine but has already fallen below the new levels set by the Treasury, will continue to drop and ease the pressure on firms and households.
Martin McTague, from the Federation of Small Businesses, said he felt it was ‘crazy’ to abandon smaller firms at this stage having propped them up through the winter.
“They have to have a realistic timetable in which they can adapt to the new much higher prices otherwise you are eventually leaving them to the mercy of Putin,” he added.
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