While announcing the closing of six of his company’s pubs, the owner of the beer chain BrewDog launched a vicious social media assault against the government, calling them “clueless.”
James Watt said the UK’s hotel industry risked “sheer rabbit in the headlights paralysis” from what he branded “this zombie administration” in an astounding, no-holds-barred essay.
The entrepreneur expressed concern that “soaring energy costs and massive cost price rises” might cause half of the UK’s clubs, taverns, and restaurants to shut.
Additionally, he disclosed that his own company, the biggest craft brewer in the UK at the moment, will be shutting six of its bars, including three in London and three in Scotland.
It happens only two weeks after an Aberdeen-based firm established what it calls the “largest bar” in the UK in central London’s Waterloo neighbourhood.
The company’s founder and CEO, Mr. James Watt, described the decision to shut the six campuses as “heartbreaking.”
But he said that he didn’t think it would be feasible to make these bars even somewhat profitable in the near future.
The closure of six pubs throughout the UK, which we announced last night, is tragic, according to Mr. Watt, 38.
“Reality is beginning to bite and bite hard in the hospitality industry.” And the government must immediately regain control.
If nothing is done, the UK is certain to lose half of its bars and pubs, along with the millions of jobs they support and the crucial function they serve in local communities.
He said, addressing the government, “It’s important that the success of Waterloo doesn’t blind us all to the reality we as a sector are facing, nor to the sheer “rabbit in the headlights” paralysis of this zombie government, still intent on this bizarre leadership farce, instead of getting to grips with the kinds of challenges that will result in more business casualties than the pandemic did.”
“Unfortunately, we are not immune from these challenges. Industry analysts believe that up to a stunning 70% of the UK’s bars, pubs, and restaurants might be forced to shut owing to skyrocketing energy costs and massive cost price rises.”
It happens the day after business leaders in the sector issued a warning that tens of thousands of bars and eateries would close their doors in the next months.
Trade association UKHospitality requested immediate assistance from the government in the form of a package of measures lasting until March 2019 that included reduced VAT in order to prevent “tens of thousands of job losses.”
Independent brewers in Britain pleaded with officials to intervene to rescue the industry last month.
Last week, the independent brewers sent a letter to chancellor Nadhim Zahawi saying that the business was facing “grave uncertainty” and requesting quick government action.
They said that as consumers try to conserve money, a decline in sales is adding to the negative effects of rising energy prices.
The letter also warned of a bad hop crop driving up costs and shortages of equipment including kegs, cans, and CO2 gas.
We have entered one of the most difficult periods for the brewing industry, according to the letter from the brewers, which was also signed by the chairman of the Campaign for Real Ales.
Small brewers claim that their energy costs are double or doubling, endangering their capacity to brew in the future.
Up to 70% of pubs do not anticipate making it through the winter, according to research by trade journal The Morning Advertiser, because of the rise in energy prices.
Just two weeks after opening its biggest pub at Waterloo station, BrewDog announced its intention to close.
The 26,500-square-foot bar, which is equipped with ping pong tables, a duckpin bowling alley, and a 10-foot spiral slide, just opened a short distance from Waterloo.
Additionally, it follows Mr. Watt’s admission earlier this year that he was “extremely aggressive and demanding” in the midst of a workplace culture controversy in which he was charged with improper behaviour and power abuse.
The 38-year-old has been the target of several allegations of wrongdoing in recent years after being charged with using his position of authority improperly and acting inappropriately toward women.
However, the CEO of the business, whose culture has been criticised, said that his actions were taken “100% in good faith.”
The father of two Mr. Watt said, “It’s entirely fair to say at times in the trip I have been too intense,” in an interview with Steven Bartlett on the Diary of a CEO podcast in July.
I’ve established expectations for the team that are unreachable for many of the members since I’ve been too demanding in the past.
Because I was so focused on “let’s develop the thing, let’s generate more employment, let’s give more value for our consumers,” I pushed for such high standards and unreasonable timeframes.
“The purpose was 100% positive, but I did push them too far because I was so invested in and focused on that,” said the speaker.
The corporation emphasised last night that none of the six closures will result in the loss of employees.
Hop and Anchor in Aberdeen, Smithfield Market Arms in London, Hop Hub in Motherwell, and its BrewDog pubs in Dalston, Old Street, and Peterhead are among the locations that will shut.
All employees have taken positions at other BrewDog sites, a BrewDog representative said. There won’t be any job cuts.
“This is a standard component of our portfolio evaluation.”
These bars were far from being financially feasible due to rapidly rising expenditures, especially skyrocketing electricity prices.
It comes as a different brewery owner yesterday expressed concern about how rising energy costs may cause bars to shut. Electricity and gas costs, according to landlords, have increased by 300%.
Rising energy prices are putting small companies in a dilemma by increasing operational expenses and making it hard for some owners to stay in business.
Six of the largest pub and brewing firms in the UK called on the government to take immediate action to prevent “real and significant irreversible” harm to the industry in an open letter published today.
This may include establishing an energy price ceiling for companies, similar to the one now in place for consumers.
One renter told St. Austell Brewery’s chief operating officer, Andrew Turner, that their energy costs had increased by more than 400% in the last week.
“Unlike consumers, small companies don’t have an energy price ceiling, therefore we are witnessing spiralling expenses for our tenants, bars, and breweries,” he said in an interview with Sky News.
It completely wipes away the earnings they are now generating, raising the issue of why on earth they would continue to open their doors.
Sasha Lord, Greater Manchester’s nightlife economy adviser, also issued a warning today, stating that seven out of ten pubs would not survive the winter without help from the government to reduce rising costs.
We’re simply desperate, he said, according to LBC. Bank holiday weekend should have been a time for relaxation, but instead the whole UK is gripped by dread, worry, and tension. The fifth-largest industry is us.
“Our current situation is far worse than it was during the epidemic.” There was at least some assistance back then. Just now, we were freewheeling toward a rock face.
“There will come a day when it is too late.” If nothing is done, seven out of ten bars won’t make it through the winter.
Operators could be faced with out-of-control energy expenditures if the price of gas continues to rise if there is no small business alternative to the consumer price ceiling.
In order to avert the possibly “catastrophic” scenario, Mr. Turner has urged the government to exercise more leadership.
“Right now, it seems like we are sitting in the void, with no major leader at the top to make choices,” he concluded.
“We need the Government to step up and make choices, to assist our industry, and to ensure that such a cornerstone of UK business can get through this difficult period,” the petitioner said.
The British Beer & Pub Association’s chief executive, Emma McClarkin, supported the requests for financial assistance to provide pubs with “necessary headroom.”
“We are desperately calling for action from the government to give us an energy cap for small businesses and to do a long-term plan with hospitality,” she said.
“By making sure they are taking action to give them essential headroom like cutting VAT, business rates, and keeping beer duty low, we can save pubs and brewers at the heart of our communities.”