Why Pubs In The UK May Be In Danger

America may be facing its highest energy costs and food inflation rates since the 1970s (per The Wall Street Journal), but the urgency of Britain's energy crisis may be even greater. According to CNN, the £100 billion it would take for the U.K. to keep its gas and electricity prices stagnant over the next two winters could cost the country even more than it allocated toward paying its furloughed workers' salaries during the pandemic. 

According to a statement released this week, the Institute for Government predicts that it would take an extra £23 billion to safeguard British households against "about 90% of the expected rises in energy bills" until April 2023 (per CNN), and another £90 billion the following year. The average U.K. household currently pays upwards of £1,970 in energy costs each year, and that number is only expected to increase, putting nearly half of British families at risk of poverty (via BBC). Britain is in this sticky situation for a specific reason, and beyond the detriment to personal households, it could also effect U.K. pubs — and the British hospitality industry as a whole — in the long run. 

UK businesses are desperate for a cap on energy bills

Just as bars and restaurants around the globe were beginning to welcome back pre-pandemic levels of foot traffic, an overwhelming number of pubs in the U.K. have found themselves in the jaws of another survival threat: sky-high electric bills. According to a survey conducted by The Morning Advertiser, nearly "three quarters" of participating pub owners admitted that they may have to shut off their Guinness taps for good this winter without help from the government. More than half of pub owners said their utility bills had increased by over 100% in recent months. "Even a 20% increase would be unaffordable, never mind 200%," wrote one participant. 

Even before Russia's invasion of Ukraine in February — which has been a major player in the inflation of gas and other products around the world — wholesale natural gas prices in the U.K. had already begun to soar from a staggering post-pandemic increase in demand (per CNN). Scottish Power, a major U.K. energy supplier, is encouraging the government to implement a £2,000 freeze on energy bills and to "give money to suppliers to meet the much higher costs of gas and electricity on wholesale markets."

To make matters more pressing, all of this is taking place as the country awaits a new leader to replace resigned Prime Minster Boris Johnson (via The Guardian). When it comes to pubs, eateries, hotels, and other hospitality businesses in the U.K., The Morning Advertiser warns of an "extinction event."