Pub giants Fuller's and Mitchells & Butlers revealed they had plunged to multimillion pound losses on Thursday amid warnings the industry faces "looming disaster" with many pubs and breweries at risk of permanent closure.
Simon Emeny, the chief executive of Fuller, Smith & Turner, told the Standard the new tiers system has "singled out" the sector. He predicted most central London pubs "will remain closed from now until April" and highlighted industry estimates suggesting 73% of pubs will be unprofitable under the new tier 2 rules.
Fuller’s owns scores of pubs across central London, including the famed Coach & Horses in Soho.
Emeny told the Standard: "I'm not sure what agenda the Government is trying to follow here... Tier 2 is essentially where tier 3 was beforehand, and people felt it was impossible to operate profitably then.”
He added: “We provide employment, we provide much-needed tax revenue, we also provide enjoyment for people's mental wellbeing. It seems illogical that we are being singled out.”
The firm today reported a loss of £22.2 million in the half year to September 26, down from a £17 million profit in the same period last year. Revenues plunged to just £46 million.
Pub giant Mitchells & Butlers, the FTSE 250 firm behind All Bar One and the Harvester, Toby Carvery and Browns chains, added to the gloom.
It made a statutory pre-tax loss of £123 million in the year to September 26, down from a profit of £177 million in 2019. Total revenues of £1.48 billion had declined by 34.1% on the £2.2 billion reported in the 2019 full year.
The firm, which controls more than 1,700 bars, pubs and restaurants, also revealed that it has slashed around 1,300 jobs since the end of the financial period, after earlier confirming it is to close up to 20 sites.
Pubs have had to pour millions of pints of beer down the drain while closed. Job losses have mounted, with Fuller's confirming today that its staff numbers are 20% lower than they were at the start of the financial year, in April, after major job cuts.
Fuller’s Emeny has joined the bosses of Marston's, Greene King, and the UK divisions of Carlsberg and Budweiser, in writing to Boris Johnson to say the sector faces a "looming disaster" unless the Government provides an immediate rescue package.
They wrote that the "future of hundreds of breweries and thousands of pubs hangs in the balance", and called on Government to consider new grants packages, extending the VAT cut extended to hospitality, and to cut the rate of beer duty.
Under new tier 2 restrictions pubs in tier two will only be allowed to serve alcohol with a substantial meal, while those in tier three will remain takeaway-only as in lockdown. The bosses said the blow to wet-led pubs and breweries will be "devastating".
Both Emeny and Mitchells & Butlers chief executive, Phil Urban, told the Standard they were cheered by recent vaccine updates, and said they were confident their firms can ride out the crisis.
Urban was less gloomy about the prospects for M&B revenues under Tier 2 restrictions, as most of its sites serve substantial meals, and said the scrapping of the 10pm curfew would have a positive impact.
He said: "The main point I would raise is that when we have been able to trade, when we have reopened the doors, our customers have come back very strongly. We remain confident that once this is all behind us, we will be able to get back on the path that we were on very quickly."
In its results statement, Fuller's its position had been helped by having an estate that is 92% freehold.
Emeny stated: "We entered this crisis in a position of strength, buoyed by the sale of the Fuller’s Beer Business.
“This business is armed with a well-invested and well-balanced, freehold estate, excellent people, robust financial foundations, a clear and consistent strategy, and the drive and desire to lead the way out of this crisis. The long-term future for Fuller’s looks positive.”