Tough times for pubs – but help is available

Research published by the Campaign for Real Ale (CAMRA) has revealed that over 300 local pubs have closed in the last six months and closures are continuing at a rate of 12 each week. Lancashire and London were worst affected, with a total of over 100 pubs closing in those two areas.  But other areas of the UK are also seeing significant numbers of pubs shutting the doors, including Derbyshire, West Yorkshire and the West Midlands.

The closures are being blamed on a ‘perfect storm’ of contributing factors, with the decrease in consumer spending as a result of the recession being compounded by supermarket discounting and above-inflation rises in beer duty. Continuing woes within several pub estate companies are adding to licensees’ problems.

There has never been a more challenging time to run a pub. Changing consumer spending patterns and social changes over the last thirty years has removed much of the ‘traditional’ custom from pubs. Whilst new opportunities have also opened up, it often relies on heavy investment in premises, staff and facilities to meet those opportunities and in the post-Credit Crunch economy, investment is simply unobtainable for many small businesses. Pub insolvency is becoming increasingly commonplace as more pubs are struggling with debt and cash flow problems.

We have seen a steady increase in the number of enquiries from pub licensees who are struggling to keep their businesses afloat in the current climate and there doesn’t seem to be any end in sight to the problems within the industry. Increases in running costs have led to spiralling debts for many pub businesses.

The good news is that there are a number of options available to licensees who find that they are struggling with poor cash flow and increasing debts. We have arranged a number of repayment plans for pubs and licensed premises across the UK, where creditors agree to receive reduced repayments and they may even agree to write off some of the debt in the right circumstances. We find that HM Revenue and Customs are often a major creditor in respect of unpaid VAT, PAYE and other taxes and we have an excellent track record in negotiating with HMRC to reach an affordable arrangement. These arrangements are designed to save the business and ensure that the pub stays open. We have also acted for licensees who wish to sell their business and exit the industry, and in extreme circumstances we can organise an orderly winding up of a pub business if there are no alternatives for keeping it open.

If you are a pub licensee and you are struggling to keep your pub afloat, call us now for impartial advice on all your options. Call Paul Moorhead today on 01709 331300 to find out how we can help.