Surplus beer and food
Not for the first time, pubs and restaurants were caught with full cellars and larders by the very short notice given for a major change, in this instance the move into Tier 3 from 16 December (the damage having been done before the coming of Tier 4 and the second lockdown). Having come out of lockdown in early December, many had stocked up for Christmas and New Year leaving them with suppliers’ bills to pay. That day the Evening Standard ran an interesting article about what happens to it. Most of the article referred to restaurants but the pub trade did get a mention.
Karen Bosher, the Managing Director of Greene King’s Premium, Urban and Venture Division, said, “The fact we are not compensated shows a lack of material understanding of what we are having to throw away, or give away to food banks. It comes at a material cost to the business.” As previously, Wetherspoon’s pubs sold off beer at 99p per pint. The George Inn, Borough High Street, was selling lager for £2.00 and cask ale for £1.49. The manager explained that whatever remained would be transferred to another Greene King pub, the Anchor on Bankside, which, unlike the George, is able to sell takeaway beer. His surplus food stock was donated to a local food bank.
Several restaurants gave their surplus fresh food to the staff that they were having to return to furlough and who faced Christmas on 80% of their basic wage without the customary bonus of tips. Others offered very generous discounts to local residents or restarted their on-line sales operations.
Since March the Evening Standard has been running an appeal called Food for London Now. Its partner in this campaign is the Felix Project, London’s biggest food redistribution charity. It includes a number of CAMRA members among its volunteers. Richard Smith, Felix’s Head of Supply, commented, “The Felix Project is exceptionally busy rescuing food supply from restaurants and bars who have had to close because of Tier 3 restrictions. Food waste is always a problem at Christmas but these sudden restrictions are aggravating the issue. We urge restaurants and pubs with surplus food in London to get in touch and we will do our best to get it safely out to good causes serving people in need.” Let us hope that the appeal was successful so that some good came out of the situation and that the donations didn’t include too many scotch eggs.
Victory in insurance case
On 15 January the Supreme Court found against certain insurance companies who claimed that their business recovery policies excluded cover for the consequences of the COVID pandemic. The case was brought by the Financial Conduct Authority (FCA) together with a claimants’ action group and it is estimated that it will help some 370,000 small businesses. Others, sadly, will have already closed for good. It is uncertain how many pubs will benefit. Tenants of some of the larger pub owning businesses were obliged to take out policies with the POB’s preferred insurer. It may not be all good news however. Some policies were worded in such a way that COVID claims were legitimately excluded. The cost to the insurance industry will no doubt be recovered by increased premiums and the exclusion of certain types of business.
Financial assistance
As previously, various grants and loans have been promised to compensate for the third lockdown. Most of these, as before, will be administered by local authorities, to whom the Government is advancing a further £594 million. Once again, the grants are based on rateable value as follows:
Rateable value Grant
£15,000 or under £4,000
£15,000 to £51,000 £6,000
Above £51,000 £9,000
The Coronavirus Job Retention Scheme (CJRS), otherwise known as furlough and originally due to end on 31 October, has been extended to 30 April. It has returned to paying 80% of an employee’s wages, with the employer being responsible for National Insurance and pension contributions and, should they choose (or be able to afford) to do so, the remaining 20% of the wages. There will be a review at the end of January. Trade bodies are still looking for a better financial assistance package, including the continuation of the business rates holiday into 2021/2022 and a reduction in VAT. The latter is now entirely at the Government’s discretion following the end of the EU transition period. The VAT reduction to 5% for the hospitality sector (excluding alcohol sales of course) had, in any event, been extended from 12 January to 31 March. This was notified by HMRC on 3 December. It is worth remembering that whenever alcohol is purchased, in a pub or a supermarket, the Government still receives the duty and the VAT. I should add that while CAMRA wants to see pubs receive proper financial support, we are not alone in still waiting, despite many requests, to see any substantial evidence that closing COVID-secure pubs is necessary to prevent the transmission of the virus.
Rent relief
If any particular debt is likely to lead to pubs closing, it is rent arrears. UKHospitality estimated that, at the end of December, rent debts in the hospitality sector stood at £1.6 billion, and a further quarter’s rent fell due on Christmas Day. The moratorium on taking debt recovery action for commercial rent arrears, including actions for the forfeiture of leases, has been extended to 31 March. Although welcome, it delays rather than solves the problem. The various pub owning companies have different approaches to the situation; some are being very good; others are not. The Government’s advice is that businesses should pay any or all rent where they can, which isn’t particularly helpful. CAMRA’s National Chairman, Nik Antona, said, “The Government must deliver a proper financial support package for publicans and do something to make sure that thousands of commercial pub tenants don’t face eviction in April 2021. As before, we want pub companies to lead by example and cancel rent for tenants where pubs are forced to shut, as many in Tier 2 and 3 areas are, and, where pubs can open, charge rents that are reflective of actual trade – which has been decimated by the restrictions placed on pubs across the UK. While some business tenants have agreed rent holidays and deferrals with landlords over the past nine months, many have not. The Government has said this latest extension also aims to give landlords and companies a further three months to come to agreements.” The Government has indicated that commercial landlord and tenant legislation is to be reviewed because it is thought to be no longer fit for purpose for the current economy.
Brewers ask for help
At the beginning of January the Society of Independent Brewers (SIBA) sent a letter to the Prime Minister signed by more than three hundred small independent breweries. As mentioned elsewhere, breweries are not classed as being in the hospitality sector. While, unlike pubs, those with shops can continue to supply takeaways (provided that they have the correct licence), breweries did not receive the various hospitality grants, the VAT reduction or the business rates holiday. SIBA Chief Executive James Calder told Drinks Retailing News that the aim of the letter was to, “convey the depth of feeling from the independent brewing sector that it has constantly been overlooked, but more so that it is imperative this Government acts now or risks setting the British brewing industry back a decade with widespread business closures. The hugely important Christmas period has been a joyless one for brewers, as the vast majority of their market is closed yet there has been no compensation and little support forthcoming. The Prime Minister needs to make it his New Year’s resolution to help small breweries, secure the future of one of Britain’s most successful manufacturing industries and deliver an urgent package of direct support for small independent breweries.” SIBA want the measures mentioned above to be extended to small breweries and for compensation to be paid for the millions of pints that have to be thrown away when pubs are forced to close. Even though they can reclaim the duty, they still have to pay for the ingredients used. The proposed changes to Small Brewers Relief also remains a concern. The Scottish Government has promised £1.8 million in help for small breweries north of the border and the business rates holiday has been extended to manufacturing businesses, including breweries, in Northern Ireland.
Substantial meals
I thought that I would include this, just in case at some point we return to Tier 2 under the previous rules. That said, very few people could see the point of this requirement and the definition of a ‘substantial meal’ became a running joke, mostly because of comments by certain members of the Cabinet concerning scotch eggs, pasties and salad. Although the ministers appeared ignorant of it, there was a basis of case law, Timmis v Millman (1965). The circumstances were that two pub customers were accused of simply drinking in a pub that had a supper licence which required them to have a meal. They were eating sandwiches which the police said was not a meal but their successful defence was that they had pickles and beetroot with the sandwiches and this made it a table meal and not ‘a mere snack from the bar’. Also, it is legal to serve 16 and 17-year olds alcohol in a pub or restaurant so long as it is with a ‘table meal’ which the licensing legislation defines as a meal that ‘might be expected to be served as a main midday or main evening meal, or as a main course at either such meal’. Disappointingly, there were reports of a lot of food going to waste. CAMRA’s Chief Executive, Tom Stainer, commented, “It’s disheartening to hear that the new government restrictions have resulted in an increase in food waste, particularly at a time of year when many families will be forced to go without. This simply underscores how little thought has been given towards the ‘substantial meal’ requirement. It really has been a recipe for disaster from start to finish.” All the same, you do have to admire the inventiveness of many pubs in coping with the requirement, not least the use of instant meals, to which the publican just had to add hot water.
A strange anomaly occurred at the end of the second lockdown on 2 December. Although in areas under Tier 2 pubs could only serve alcohol with a table meal, the same requirement did not apply to cinemas, theatres, concert halls and sports grounds. According to the regulations, alcohol could be served if it was ‘ordered by, and served to, a customer who has a ticket for an exhibition of a film, a performance or an event of training or competition at the venue, to consume in the area where the audience is seated to watch the exhibition, performance or event’. In December, the Chief Executive of Young’s, Patrick Dardis, complained to the Daily Telegraph that police officers and other officials had been going into pubs and subjecting customers to ‘overzealous’ enforcement of Tier 2 regulations, disputing what constituted a substantial meal and making sure that customers left as soon as they had finished eating. Deputy Chief Constable Paul Netherton, the lead for civil contingencies at the National Police Chiefs’ Council, was reported on MSN News as saying that the police were well aware of what constituted a substantial meal, but that it was down to local council licensing departments to ensure pubs were abiding by the law and he added, “Police will not be visiting pubs checking on what people are eating. If we are faced with an issue, we may issue warnings and take action. We have other priorities.”