CLH News #206 November 2017

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THE LEADING PUBLICATION FOR THE INDEPENDENT HOSPITALITY SECTOR

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Maximise your Profit Margins Minimise your Operating Costs Resolve any Operational and Staff Issues Increase the Profit from your Business

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November 2017

Issue 206

Hospitality Technology

Design and Refit

Property and Professional

Pages 26 - 30

Pages 31 - 35

Pages 36 - 38

British Pubs Are Put At Risk By Chancellor’s Five Year Plan To Penalise Alcohol Pages 20 - 21

Pages 22 - 25

INDUSTRY BODIES are calling on the government to instigate pre-and post-budget measures to support the hospitality sector. The Association of Licensed Multiple Retailers said that the eating and drinking out sector is a major asset to the UK economy and has the ability to drive further growth but could face barriers to said growth without decisive targeted support from the government. The Wine and Spirit Trade Association and the Association of Licensed Multiple Retailers (ALMR) have teamed up to warn that more British pubs will be under threat of closure if the Chancellor fails to scrap his punitive 5 year plan to raise alcohol duty.

Wine and spirit sales in UK pubs account for 36% of alcohol sold across the bar, worth almost £6 billion to pubs in the 12 months to September. Landlords across the country, however, had to pay huge duty bills, totalling £843 million on wine and spirits alone, into the Treasury coffers. This is the equivalent of almost £17,000 per pub. The ALMR has therefore called upon the Government to immediate, short-term support by: • Undertaking a much-needed and long overdue reform of the business rates system • A freeze, or at least a cap, in the multiplier for April

2018 • Increasing pub-specific relief to £5,000 per annum and broadening it to include the wider eating and drinking out sector • Freeze Alcohol Duty excise rates • Committing to be led by the Low Pay Commission’s recommendations when determining minimum wage rates. And securing the long-term health of the sector by: • Securing a future immigration policy that recognises the eating and drinking out sector’s workforce • Working with businesses in the sector to produce a postBrexit tax and regulatory regime that promotes growth and allows the sector to compete globally. In March this year, the Chancellor increased duty by inflation at 3.9%, which added 30p to an average priced bottle of spirits, 8p to a bottle of still wine and 10p to sparkling wine. The Chancellor of the Exchequer, Philip Hammond, increased alcohol duties, lifting a freeze on beer and spirits duties which had been imposed in 2015, resulting in duty on beer, cider, wine and spirits increasing by RPI inflation (currently 3.9%), effectively ending a freeze that had protected beer and spirits from further duty increases. A freeze on wine had already been lifted by the chancellor in the Spring statement last year. The WSTA and ALMR are both calling on Government to do more to support the historic British pub following a spate of pub closures. On average, 21 pubs are closing each week across the UK, and further rises in duty rates will only increase pressure on landlords across Britain. The wider on trade is becoming ever more dependent on wine and spirits, with sales of those categories accounting for 46.2% of new openings in the last two years compared to just 39% of closures. New research by CGA Strategy on behalf of WSTA shows that, on average, 4 new spirit brands were added to the back bar since 2013, meaning that there are now an average of 36 spirit brands behind the bar. Anyone who has expanded their range of spirits has

seen a 10.6% increase in value sales, versus those who decreased their range, who saw declining sales of 1.7%. Thanks to the Prosecco boom, sparkling wine has seen a meteoric rise in sales in our pubs. Latest figures show that sparkling wine sales in pubs have gone up from 3m bottles sold in 12 months to Sept 2013, worth £45 million, to 9.5m bottles sold in the same period to September 2017, worth £204 million. Miles Beale, Chief Executive of the Wine and Spirit Trade Association said: “The Chancellor is in danger of missing a huge trick, he could also show his support for the wider UK hospitality sector. “He needs to change tack because the pain will not end there, with established government policy being to inflict repeated duty hikes throughout the rest of this Parliament. “Wine and spirits duty accounts for more than a third of annual pub sales. We are calling on Philip Hammond to help save our British pubs by freezing duty, allowing them to reinvest and stay in business. “We know that previous decisions to freeze alcohol duty have brought in more revenue for the Treasury coffers, not less. So a duty freeze makes sense for everyone – from the Chancellor, to pub and bar owners, and consumers. With the last rise having come just eight months ago, freezing duty is the least Philip Hammond can do!” Kate Nicholls, Chief Executive of the Association of Licensed Multiple Retailers, added: "Pubs in every region of the UK are facing a perfect storm of rising costs and softening consumer demand. Uncertainty and barriers to growth and investment are being exacerbated by the instability being created by Brexit and many venues are looking for positive action from the Government to provide support. "An increase in duty rates is only going to pile on more costs which pubs cannot continue to absorb prices will start to rise and threaten consumer demand even further.

RETURN TO PROFIT

Let us help you put your business back into profit...

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If you have a Restaurant / Hotel / Pub business that is not profitable, and you want it turned around, call David Hunter on 07831 407984 to discuss this. We have a very impressive 30-year track record of profit turnaround, and David is the very best person to help you to turn your business around.

If your business IS profitable, but you need it to be MORE Profitable, David Hunter can do this for you. David will ‘’benchmark’’ your business against the current market, and will tell you what SHOULD and CAN be achieved by that particular and individual business. David will work with you and your Team to deliver that essential improvement in Profitability.

We will tailor a package that is realistic… and practical, for you… Please call David Hunter of The Bowden Group about how we can HELP you…

07831 407984 or 01628 487613

HOTELS, RESTAURANTS, PUBS & CATERING

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