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Pub failures increase as consumer downturn gathers pace
3 November, 2008
Insolvency firm predicts worse to come for sector as recession takes hold
More than 300 companies in the hospitality and leisure sector went bust in the third quarter of 2008, with among the hardest hit being pubs and bars, restaurants and hotels.
With a recession looming, insolvency experts PricewaterhouseCoopers (PwC) said the situation was likely to get worse in 2009, as consumers traded down and sought better value for money.
According PwC to the impact of the smoking ban, two wet summers, failure to qualify for Euro 2008, the growing presence of the off-trade and now the consumer downturn have “proved too much” for many pubs and bar operators.
More than 60 businesses, including the much publicised collapse of Cains Brewery in Liverpool, have gone under during the last three months, PwC said.
The figure represents an increase of 156 per cent since the end of 2006, the firm added.
Stephen Broome, a director at PwC’s hospitality and leisure team, said: “There are no surprises that in the last year pub insolvencies have increased by 113 per cent.
“The majority of pubs suffering distress are wet-led community pubs losing out to supermarkets.
“Some have also found the competition from well-known pub chains has had a detrimental effect as brand and familiarity become more important to consumers when personal expenditure is under pressure,” he added.

Readers' comments
Easy - Let's get back to what people generally want and not silly (mostly made up) health issues and other decisions for mistaken political gain. Firstly remove the smoking ban, or at least make it a 'choice' to the adults in the UK. Anyone brave enough to say they will do that? Dear old Boris Johnson backtracked on that one even when elected as the London Mayor! Michael
I am writting this message to release a little frustration regarding our lives in Britain at present. My husband and I have worked hard all our lives (we are now 48) we had built up enough to keep us ok in our old age if we are lucky enough to get there. We bought a pub lease 2 years ago. At the time was a good business venture making us a little profit and good enough for my husband to give up his boring 9-5 job. 6 months ago my husband had to go back to work to keep our heads above water. We now find ourselves losing every day we stay in the business this includes my husbands wages. The business is costing us a fortune instead of the other way around. We have no savings left for our latter years and the lease on the business is worth nothing when we paid £110,000 for it just 2 years ago. What is the Government doing. Don't they realize the knock on effect of the leisure business folding. A few years ago the country was hit by foot & mouth and the government stepped in and helped those affected. Many publicans etc are finding themselves in the same position as the farmers affected with foot and mouth. In short loosing everything they have worked for Homes, Jobs, savings, and everything. Please do something fast or the prediction of 3 million unemplyed will not be a prediction it will be reality. The current market is a world wide problem I know but the pub business in our country is down to the goverment eg smoking ban, cheap sales of beers and wines in the supermarkets and allowing alcohol to be sold in every outlet I can think of. The prices of the rents, licences, poll tax, vat personal taxes, corporation taxes business rate extra 4 days holiday for staff this lost 2 part employees their jobs as I just couldn't stretch to the extra cost of another 48 days holidays as well as wages increase in all I have now had to reduce my staff from 14 down to 4 and alot of work from myself and my husband. All are government attached in one way or another. I know the rent is the brewery but the government should stop the breweries and councils from robbing hard working people like ourselves. Thank you Labour I look forward to getting my old age pension and everything else I can claim with it cause we are losing our security we have built up over 30 years. We are by no means rich we were comfortable but now we are on the verge of bankrupcie after 30 year hard work and nothing we have done except plan for our future just as the Government advised!!!!!
If the PubCos hadn't 'opened up' the areas to get rid of the Lounge, Saloon Bar, and Smoke Rooms then perhaps a compromise solution could have been won back in 2005 whereby adequately ventilated Smoke Rooms were still permitted.
Iam wondering Roger where do you get the idea, that a political party cannot reverse or amend the law of the land,especially one that was not asked for by the people ,iam betting you where not asked, for your views even if you were in favour or not, the party in power can do what they like, we have had nu labour doing this for over ten years ,over a thousand new laws ,most designed to restrict your freedoms, the smoking ban was never about health, if it was, logic would state, ban the sale of tobacco products, its all about control and dictatorship please wake up from your slumber before its to late, ps i have voted labour all my life, my age is sixty and i swear i will never vote for these lying toerags again
Well graham i will vote conservative at the next election ,as me old dad use to say better the devil you know ,since u labour have lied to us over 10 years ,of deceit,at least you know what you get with the Tories, of course a commitment to ,amend the smoking ban would help, 15 million voters cannot be ignored,
So, as a Conservative politician Mr Allman, you are giving a firm commitment that a future Tory government would reverse the current smoking ban? No, you can't because No future government will do that - and you know it. It's a social/health issue you want to convert into a political issue to try and score a few cheap political points. Give it a rest until you've got something called policy.
Marc Dodds. Yes there have been bans in many of the countries that you list. However, not many of those bans that you list are as draconian as ours - a full blanket ban across everywhere. If you listed the countries that had legislation like ours, instead of choice like the majority that you have listed, I think that you'll find that your list is very, very, small.
Peter you are right about the 100sq.M rule in Espana. I was here when the ban came in staying in a coastal small town. a few bars went no smoking but on a recent return visit all but one have changed back to smoking throughout. I now live in a small inland village which has a population of about 2500 and has about 15 bars at the last count. All are smoking bars and many of the owners and staff (normally family) smoke even behind the bar but no one would dream of complaining. Can you imagine these bar owners and customers putting up with the ban the UK introduced. The UK has lost the plot and is now controlling everything about the way of life. The government just wants total control over everything. 1984 springs to mind. Unfortunately the British just let it happen. Glad to be out of it.
Peter , as a Conservative politician i would indeed have been in-favour of choice ( i am a total 100% non smoker) The pubs boss is the best person placed to make the commercial decision and it should not, in my opinion, have become mandatory with a total ban. But this is England in 2008 under a dreadful New Labour government. Soon be against the law to smile and be happy, do you remember those days ? Smiling and happy.
If passive smoking really is so harmful, why on earth hasn’t smoking been banned? Currently the Government protects consenting adults from the “harmful” effects of SHS but is more than happy to allow children to be subjected to it. In fact, the current Government approach actually encourages adults to smoke at home in front of their children instead of popping down to the local like they used to. Also, if it’s the employees they are “protecting,” why are motor garages/mot/exhaust centres etc still allowed to run car engines inside their workshops with little or no proper ventilation? Until the Government has the courage to outlaw the sale of tobacco products and stops raking in billions of pounds per year for the treasury, surely they have a duty to provide somewhere warm, dry and safe for the smokers of this state sponsored drug to socialise? For the life of me, I don’t understand why we can't have properly ventilated smoking and non smoking establishments. Surely that would satisfy everyone’s needs and prevent all these businesses, and lives, from being destroyed. Both my grandparents fought against the Nazis so that future generations could enjoy freedom from state interference, they hadn’t been cremated the would be turning in their graves.
At last the smoking ban has been stated as the main cause and it takes a firm of accountants to say it.
Marc says: "Look at Spain, if you feel the need to smoke, and nobody around you minds, and then more often then not you will be allowed to get away with it" You got it wrong there Marc, Spain does not just turn a blind eye. The law in Spain states that if your premises is 100 sq meters or less (I think that is the size) you (the owner) can choose if you want it to be Pro-smoking, or non-smoking. If it is over that size, then you need to provide at least a non smoking area, unless of course you choose to make the whole place non-smoking. The whole thing is about choice, which is what we should have here in the UK.
Mark Dodds, you say that the conservatives would have also introduced the ban, maybe that is the case, but I doubt it, they understand that it is small businesses that keep this country afloat, and by destroying them, they damage the country irreparably, and they usually listen to more then one side of an argument. You list a load of countries also with the ban, very few of them have similar communities to the UK, most have a warmer climate and people sit outside anyway, and many of the others do not have the thriving community pub culture that we had. Those that are similar are in just as much trouble as us. Just look at Scotland and Ireland. Also a lot of those with the ban do not have smoke Nazis who will snoop around trying to catch you out. Look at Spain, if you feel the need to smoke, and nobody around you minds, and then more often then not you will be allowed to get away with it. Oh and I'm a non smoker.
Colin , not to many people in our great trade acknowledge that other groups within the industry suffer other than Jo Publican, well said. New Labours interference in all sectors of trade have felt the cold wind of this oppressive mean government. NLs lack of ability to control costs has contributed to the consumer downturn and lack of confidence which knocks onto the ability of pubs/shops/hairdressers/anon paying their way. This is 2008 and we see people outside pubs, hotels, shops, offices ( inc mine) in the driving rain and cold having a smoke. Costs and smoking ban are contributing to the lack of feel good within the country.Time for change as in the good ole USA.
Since the smoking ban, I and my friends hardly ever go out anymore and if we do its not for long, who looks forward to standing outside in the cold and rain half the time on a night out, its just plain ridiculous.
Stupot has hit on something rarely gets a mention about the smoking ban,its just not publicans who are losing their livelihoods but thousands of other trades too, musicians disc jockeys all the different suppliers of pub and leisure equipment ,the crisp man, the prawn man, the damage this smoking ban is doing is nothing more than scandalise and i truly hope this labour government rot in hell, and i have voted labour all my life, these cretins have ruined this country, and doing very well for themselfs at our expence ,
The majority of pub and club closures are down to the smoking ban, Why should people be expected to stand outside in the rain to smoke, that is not a good night out. When we arrived at July 2008 nearly eighty percent of London landlords said they wanted the ban amended or scapped. The pubcos should have stood up for the freedom and comfort of their smoking customers.
We all know what a catastrophe the licensed trade is suffering since the smoking ban, among other things. But, let's face it, what are the pubs doing to help themselves? Not a lot from what I can see. In Holland, bar owners have formed a common ground, where they all contribute to a fund. This means that when a bar owner is fined, for flouting the smoking ban law, which is quite rare, their fine is paid through their communal fund. Other countries in Europe, openly defy the ban, as do lots of bars in the USA. If publicans here in the UK formed a similar group, and openly defied this bad law, the government enforcers could do nothing, as we all know, there is strength in numbers. But, all I hear our publicans do, is moan and do absolutely nothing else. There must be thousands of publicans who read this paper and website. Let's hear what they have got to say?
Great arguments knowkcing New Labour. Of course you guys think that if the Conservatives had been in power they wouldn't have brought in No Smoking legislation and that New Labour are responsible for the introduction of smoking bans across the rest of the workld, including USA, across Europe and Ireland as well? # 1 Argentina # 2 Armenia # 3 Australia # 4 Bangladesh # 5 Belgium # 6 Bermuda # 7 Bhutan # 8 Bosnia and Herzegovina # 9 Brazil # 10 Canada # 11 Chile # 12 China # 13 Croatia # 14 Cuba # 15 Czech Republic # 16 Denmark # 17 Estonia # 18 Faroe Islands # 19 Finland # 20 France # 21 Germany # 22 Greece # 23 Guernsey # 24 Hong Kong # 25 Hungary # 26 Iceland # 27 India # 28 Indonesia # 29 Republic of Ireland # 30 Isle of Man # 31 Israel # 32 Italy # 33 Jersey # 34 Kazakhstan # 35 Kenya # 36 Lithuania # 37 Luxembourg # 38 Malta # 39 Malaysia # 40 Mexico # 41 Montenegro # 42 Mozambique # 43 Netherlands # 44 New Zealand # 45 Niger # 46 Nigeria # 47 Norway # 48 Pakistan # 49 Peru # 50 Philippines # 51 Portugal # 52 Puerto Rico # 53 Russia # 54 Singapore # 55 Serbia # 56 Slovenia # 57 South Africa # 58 Spain # 59 Sweden # 60 Switzerland # 61 Taiwan # 62 Thailand # 63 Turkey # 64 Uganda # 65 United Arab Emirates # 66 United Kingdom * 66.1 Scotland * 66.2 Wales * 66.3 Northern Ireland * 66.4 England # 67 United Nations # 68 United States # 69 Uruguay # 70 Vatican City # 71 Vietnam # 72 Zambia
It’s got nothing to do with the smoker ban! It’s a complete coincidence that unprecedented pub closures have coincided with its enactment. We told you it would be a success and it has been FACT!!!
I know full well when all this started. The smoking ban weekend was the last good weekend the pub I worked in had. Xmas & New Years Eve were busy, but not to the tune they had been for the previous 3 years. Now - I'm on the dole. My bar manager job has gone. My own DJ Company has now been put to the side, as the 3 regular spots we had have all closed or stopped spending on entertainment. We get the odd private function now and again. The 2 other guys I had working for me are signing on too. Thank you Nu Labour......