Sector specialists Colliers International have backed calls for the Government to appoint a dedicated pub tsar to fight the corner of hard pressed publicans across the West.
With three pubs closing in the region each and every week campaigner CAMRA has urged the Government to set up a special pubs watchdog to support and advise landlords caught up in a lethal combination of high rents and soaring beer prices.
Go to hospitality sector veteran Peter Brunt - who was immediately nominated for the post by his colleagues at Colliers International – recognised some elements of the industry were struggling to keep pace with change but added there were plenty of new owners ready to take up the challenge.
Peter, who has sold more than two dozen pubs and hotels across the region despite the downturn, said: “Pubs are a key piece of the social and physical geography of Britain and are a genuine barometer for their surrounding community.
“Look at most thriving communities and you will find a good pub at the heart of it. Villages with pubs and other facilities are always more vibrant and sought after than those without.
“Although some pub businesses are closing we are also experiencing very strong demand across the region. There are plenty of buyers out there ready to have a crack at the right pub in the right location. Closed and struggling pubs will continue to be snapped up by new buyers with an eye on current and future trends.
“We have seen countless examples of tired old pubs being given a new lease of life though refurbishment or a new product offer - some of our buyers have turned the process of revamping pubs into a fine art.”
He said the faster than expected economic recovery had saved some premises but come too late to save every pub business.
“Consistent increases in food costs, wages, heat, light and power hit hard during the recession – especially as publicans found it very difficult to pass these price increases on to the consumer.
“This has eroded profits particularly for the independent operator. It is the independents that provide the variety and colour found in the village pub that would be a tragedy to lose.”
“A pub Tsar heading up a watchdog with a brief to foster and support these key pieces of the community would be a good idea and we will be backing CAMRA’s campaign all the way.”
Pressed to come up with his own manifesto for change in the hospitality industry Peter highlighted a number of areas where Government action could help relieve pressure on publicans.
“When we are marketing pubs we find a steady and consistent demand for those in settlements or with good transport links. Those that are in isolated positions or that are hard to find can struggle to maintain good footfall.
“Looking forward to the Budget I think the Chancellor can help publicans by reducing VAT to match those on the Continent, which can be as low as 5 per cent instead of the 20 per cent here. VAT relief for hospitality businesses would provide a real tonic for a sector beginning to pull away from the downturn and which is an undervalued but key element of the UK’s climb out of recession.”
“I would also like to see the Chancellor scrap VAT below the Threshold for those small businesses who wish to trade above it. The small business threshold for VAT is a turnover of £74,000, really quite modest. Above that a business pays VAT not just on the extra turnover but on all the turnover so there is little incentive to take say an extra £10,000 as the VAT on £74,000 is about £8,000 (on the fixed rate VAT scheme). To stand still a trader needs to take an extra £30/40,000, often not achievable, so they simply under perform. Free up small business to grow, they’ll end up paying more income tax anyway.
Peter said although he had never run a pub himself more than 20 years of valuing and selling them had given him something of an insight into what makes a successful business.
He concluded: “Pubs must ensure they are attracting and satisfying customer demand. Landlords can’t just stand there and expect people to turn up.
“Smart, tidy and contemporary facilities are a must and a traditional real fire welcome from landlord and staff helps ensure customers will be back for more.”