Hospitality sector receives unfair treatment from energy suppliers as prices reach 150% increase on pre-pandemic levels
Hospitality businesses across the UK are being refused energy contracts from suppliers, placing them under additional financial burden as they look to recover from the pandemic.
Throughout the pandemic the hospitality sector have faced ongoing energy issues, which have become increasingly worse. Businesses are reporting increases of 150%+ on pre-pandemic energy bills, with an average above 100%, equivalent to an £800m additional cost to the sector.
Cost increases on this scale risk wiping out already narrow margins publicans receive and could have a knock-on effect on pricing.
In addition to overly complicated application processes, risk premiums and significant up-front renewal deposits, over recent months there has also been an increase in the number of utilities providers refusing to take on new accounts or renew contracts if they are linked with hospitality. Some providers will initially quote for a business but will then renege on signed agreements leaving companies with little or no choice to secure a new provider.
Where pubs are split between domestic and non-domestic energy consumption, a refusal to supply energy raises serious concerns, it is failure of the energy providers to satisfy the obligations they are subject to under the authority of the Energy Ombudsman.
Emma McClarkin, Chief Executive of the British Beer and Pub Association, said:
“Struggling publicans that have managed to keep their heads above water throughout the pandemic now face a further financial hurdle that threatens the viability of their businesses and the ability for the sector to recover.
“The pub and brewing sector is at a pivotal point in its recovery and the erosion of margins is impossible to sustain. We are urging the energy regulator, the providers and the Government to work with us and take a more pragmatic approach with regards to the provision of energy to the hospitality sector.”