Daniel Thwaites has called on the Government to provide pubs with more support to provide them with a "sustainable platform" as they face "a broad front of increasing costs".
The Lancashire-headquartered pubs, hotels and brewing giant said that while the Government's intervention over the winter is "extremely helpful, it is not in itself a solution to longer term structural taxation issues".
It added that "pubs are critical community assets and are overtaxed" and said the Government’s review of business rates, which is due in the spring, "must give them further relief and other ways must be found through duty or VAT".
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The call came as the company published its results for the six months to September 30, 2022.
The accounts show Daniel Thwaites turnover over £57.9m, up from £47.8m, while its pre-tax profits also increased from £7.5m to £15.7m.
A statement signed off by the board, chairman Richard Bailey said: "The company has turned in a respectable performance over the last six months, a period in which we have operated under the shadow of war in Europe and also have looked to stabilise the business as support from the pandemic has been withdrawn.
"Customers have been keen to get back into their local pubs, but the trading picture is extremely mixed with a polarisation in performance.
"Some pubs are trading very well, others are not and it is difficult to discern a pattern.
"The summer was not as busy this year as last year, which benefitted from a staycation boom that has not repeated to the same extent this year, although hot weather in August was helpful.
"Beer volumes have not recovered to pre-pandemic levels and there seems to have been a structural volume decline of around 12% which may yet recover.
"This is due to several factors, but the main ones appear to be reduced opening hours from staff shortages and a change in customer habits, either going out less or going home earlier.
"There is also work to be done to encourage some of the older customers to rediscover the pub and wean themselves off cheap supermarket offers.
"At the same time pubs face a broad front of increasing costs, particularly from energy and whilst the Government’s intervention over the winter is extremely helpful, it is not in itself a solution to longer term structural taxation issues.
"Pubs are critical community assets and are overtaxed; the Government’s review of business rates, due in the spring, must give them further relief and other ways must be found through duty or VAT to provide them a sustainable platform.
"Our inns have performed very strongly over the past few years, but they are facing a challenging market and whilst they traded up year on year their costs have risen dramatically, particularly for food, meaning that margins are being squeezed.
"In addition, the staycation market was much weaker this summer as many people opted for overseas holidays."
Mr Bailey added: "The hotels and spas have delivered a robust performance in sales, which are up by 27% year on year, however due to all of the factors already mentioned relating to increases in their cost base and the withdrawal of government support, profitability dropped by 4%.
"Sales are up approximately 13% on 2019, with profits broadly flat in comparison, a statistic that paints the picture for the rest of the market at the moment.
"It has been encouraging to see demand from corporate customers recover, which forms an important part of the hotel sales mix, ands pa and treatment sales have been another highlight as customers continue to treat themselves when they visit us.
"Weddings have also performed well, as people have started to catch up on celebrations that were postponed during the pandemic."
During the period the company closed its Langdale Chase hotel in the Lake District as it makes a "significant investment" and is aiming to reopen it in November 2023.
It also sold four properties for £2.7m, making a profit of £1.3m.
On the firm's outlook, Mr Bailey said: "The company has been sailing into strong headwinds in the first six months of the year that are only strengthening. Despite that, our teams have continued to deliver superb hospitality and service.
"We have held the line in our relentless focus on quality, on which we will not compromise.
"This has undoubtedly cost us in the short term, in a market where input costs are increasing, our margins are being eroded and our challenges have been compounded by shortages of labour, which the Government has done nothing to address or alleviate.
"We have transitioned to a new world in which we no longer rely on financial support from the Government, and in doing so we have absorbed cost increases, passed them on where we can and have held our profits, which is a satisfactory performance.
"The recent performance of the Government has left people completely lost, and between Government turmoil and the relentless negativity of the media, customer confidence is being rapidly eroded.
"The cost of living is increasing, but people are beginning to adapt to increasing costs, particularly on food, energy and mortgage rates.
"Although this is likely to continue to present challenges, when people are in the mood to go out and treat themselves, it seems that on average they are prepared to spend a little bit more, a little bit less often.
"The company has fixed its own utility costs until March next year and is watching the differential between spot energy prices and forward rates closely.
"The fixed term loan with the Prudential offers us some protection against rising interest rates, and they in turn alleviate pressure from both our interest rate swaps and our legacy defined benefit pension schemes.
"Despite the challenges that face us, we will find a way through the uncertain and volatile world in which we find ourselves and whilst this winter is likely to be extremely tough, we are investing for the future and are in a strong financial position."
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