Pub boss fears closures as bills for business rates soar
Nearly half of Scottish outlets saw a drop in festive sales, SLTA reveals
SOME of Scotland’s best publicans are being forced to close their doors for the last time because punitive costs including huge increases in business rates are making it unviable to trade, the body for independent pubs has claimed.
The warning comes as nearly half (44 per cent) of pubs, clubs and small hotels in Scotland reported a fall in sales over Christmas and New Year, compared with the previous festive period.
The Scottish Licensed Trade Association (SLTA), which compiles the survey of more than 600 outlets, said the figures are deeply concerning given the low base against which they are compared.
Figures released by the SLTA last January revealed the dramatic impact on Christmas takings from the reduction in the drink-drive limit at the end of 2014, particularly on rural outlets.
This latest bleak verdict on festive trading, which again highlights the pressure on rural pubs from the lower drink-drive limit, comes as operators face the prospect of a massive rise in business rates.
According to the SLTA, more than 60 per cent of outlets have seen an increase in rateable values following the latest revaluation. While the assessors’ body measures the average rise at two per cent, the SLTA said the average rise among its members is 14 per cent.
Compounding the pressure on pubs are rising utility costs, which the trade body said is affecting more than 70 per cent of members.
Paul Waterson, chief executive of the SLTA, said: “When the drink driving regulations were changed we saw a dramatic fall-off in business, and you would imagine after this amount of time, people would be saying there is a bit of growth and not much more decline, albeit from a low base,” he said. “And what we are seeing, from a very low base at last Christmas in comparison to before, is continuing decline in many businesses.
“What makes that worse is that we now have the new draft rateable values in, and many places are seeing up to 100 per cent increases in their rates.”
Mr Waterson said the increasing cost burden facing pubs means that even the industry’s best operators are struggling.
In some cases the ability of a business to successfully appeal to their rate revaluation holds the key to whether or not they can continue to trade.
Mr Waterson claimed the pub industry was being “discriminated against again” by the business rates system, stating that the sector is treated unfairly because pubs are “uniquely rated on turnover”. This contrasts the situation facing supermarkets, whose rates bills are based on the square footage of their premises.
Speaking in the week it emerged that what is believed to be Glasgow’s oldest pub, the Old College Bar on High Street, is closing to make way for a student accommodation development, Mr Waterson said: “These wellestablished, historical places [are] closing. Of course you will get that as the market moves on.
“These people who run pubs like that are very professional but they don’t see a way out of the malaise that we are in, and will take offers if they can get them.
“I know a lot of really good professional guys who ran their pubs for years and they can’t make them work, not because they are not good but because of external pressures.
“There is no doubt that the latest rates increases will be the death knell for many more.”
The SLTA, which carries out its survey with KPMG, found that 30 per cent of businesses saw sales rise over Christmas and New Year versus last year, with 26 per cent reporting steady trading.
On a brighter note, 76 per cent of outlets reported a growth in craft beer sales, and three-quarters said soft drinks sales were up.
Asked if he feels pubs will benefit from more tourists visiting Scotland because of the weaker pound, Mr Waterson replied that any upside here will not offset the rising cost base facing the sector.
The Scottish Government recently carried out a consultation on the business rates system.
Mr Waterson said the SLTA had submitted its views to the review but noted it had come too late for the latest revaluation. “They’ve got to look at this – it is so unfair.”
‘‘ I know a lot of really good professional guys who can’t make it work, not because they are not good but because of external pressures