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Birmingham Post
Birmingham Post
Business
Andrew Arthur

Pub firm Liberation Group warns energy costs will double despite government support

Pub and brewery firm The Liberation Group has warned its energy costs are set to double “even with the support” announced by Prime Minister Liz Truss to help firms with their energy bills.

The Jersey-based parent company of West Country brewery and pub brand Butcombe - which has a portfolio of more than 50 managed and around 65 tenanted pubs across the South West and Channel Islands - has called on the government to provide “further details” on how it will support businesses and consumers with rising costs.

The independent brewer said despite “a strong summer of trading” it had not been immune to inflation pressures currently facing the hospitality sector.

In a trading update for the period May 21 to September 3 2022, the firm reported total like-for-like sales across its managed pubs had risen by 6.3% compared to last year and up 30% on pre-pandemic levels in 2019.

The company said this had been driven by “an encouraging performance” on drinks, a “robust” performance on food - and record sales in accommodation due to another “strong summer of staycation” amid disruption to international travel as Covid restrictions were gradually lifted.

It added the Butcombe brewing and drinks brand had enjoyed a “very strong summer” including a record August, helped by an “excellent” performance in the Free Trade, record customer numbers and spend, as well as “strong sales” in the group’s own estate of venues.

Despite this, the group said it had had to work with suppliers to “develop new menus” to mitigate “strong levels of food inflation” arising from “surges'” in the cost of products such as oil.

While it welcomed plans announced last week to address the energy crisis - including a freeze on domestic bills at around £2,500 and equivalent support for businesses for six months - The Liberation Group warned its utility costs on the UK mainland were set to double in October.

The company said: “We are keen to understand further details from the government, including longer term utility support and actions to reduce VAT and suspend business rates.

“Once again, we have cause to be thankful of our group composition and geography as utility inflation and costs in the Channel Islands has been kept to a manageable level over the next few years which helps blend and balance our overall cost base.

“Despite the obvious headwinds for our customers and ourselves, we are confident in our ability to deliver a fantastic Christmas for our customers and ongoing investment into our business is testimony to the belief in our teams and in the potential for our business over the next few years.”

Read next:

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Liz Truss energy plan - tell us what you think about support for business and fracking plans

Energy crisis could lead to closure of businesses and 'irreparable harm' to tourism, warns Bournemouth boss

'Devastating' numbers of pub closures as costs spiral

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