Scotland's pubs are in a fight for survival because of soaring power bills, industry chiefs have warned. Paul Waterson, honorary president of the Scottish Licensed Trade Association (SLTA), said that utility bills which are “outrageous compared to other European countries” are driving people out of business.
He added: “People think it is small operators that are at risk but many of our members have multiple pubs around the country and are barely clinging on.
“Energy prices are tearing the hospitality sector apart.”
Waterson was responding to a warning from energy consultant Connor Wilson, who says power firms are profiteering on the back of the current crisis. Wilson, who represents about 100 small businesses – the majority of them pubs – says he gets at least one call a week from a client in tears as they know “it’s all over”.
He fears the public is being misled about the energy crisis and is angry that despite the wholesale price of electricity coming down by more than half since its peak in August, prices keep rising. He said the UK energy supply was hardly affected by Russia’s illegal war in Ukraine as the UK buys only about four per cent of its gas from Russia.
Wilson believes utility companies have exploited the situation to justify prices.
He added: “The Government publishes the wholesale price every week. It’s not easy to find, perhaps because so many people don’t want the public to know they are being ripped off.
“The latest prices showed electricity at 33.02p per kilowatt (KW) – well down on 43.36p a week before – and gas at 11.21p per KW, down from 12.03p. So why do the prices keep going higher?”
Tony Reynolds had a lease agreement on a pub that first opened in 1962. He had run successfully The Bullfrog, in Motherwell, for a few years.
It was a popular bar and was a base for four pool teams. It was also a centre for the card game Phat, played mainly by regulars who had links with the long-gone steelworks in the town.
In addition, a bus left the pub regularly for home matches at Celtic Park. Among the regulars was Mick Tierney, father of Arsenal and Scotland star Kieran Tierney, a former Celtic player.
In autumn, the three-year electricity contract Connor Wilson had set up for Tony was running out and he received a letter telling him his charges would go from 17p per KW to 60p.
Tony, 56, said: “That was already going to kill us. We couldn’t pay that.
“But then we got a letter telling us it would actually be going up to £1.10 a KW, more than five times what we had been paying.
“I didn’t really have to do my sums – I knew that was me out of the pub game.
“I put a notice out on Facebook to say we would be shutting our doors for the last time that weekend in November and invited our regulars to come and have a drink with us.
“We had a good farewell and, typically, the locals raised a load of money for charity.
“I’m sad about losing the pub and the social life it involved.
“I feel really bad that a community has lost its heart, especially for the older guys that came to play Phat together and talk about the old days.
“The Bullfrog meant a lot to them.”
Wilson said business premises in Scotland paid 40 to 50 per cent more for energy than those in England – despite Scotland generating so much of the UK’s renewable energy, as well as six times more gas than it used.
He believes the UK Government should be telling suppliers that while it was understandable prices were higher than a year ago, there was no justification for the recent huge rises when costs were falling.
He added: “When wholesale prices were down at 5p to 7p per KW, utility companies negotiating a contract with a business would build in 2p or 3p per KW profit. Now, a few months later, they’re building in profits off the scale.
“A busy pub can go through 100KW of electricity in a year. Twelve months ago, some of my clients were paying 16p per KW and £16,000 was enough to be one of their major concerns as they worked out budgets.
“Now, some clients who have gone out of contract in the last few months have been told they’ll be paying £1 per KW, even £1.10. So their annual electricity bill can rise to £110,000.
“Even with government support, which would take that bill down into the £80,000s, it’s still a 500 per cent increase. Not many businesses can absorb that.”
A spokesperson for energy regulator Ofgem said: “We have been made aware of recurring detriment that business customers are facing in the non-domestic supply market.
“We’ve reached out to suppliers with a best practice guide. We will be keeping an eye on actions taken to close the gaps identified and will consider enforcement action where necessary.”
A UK Government spokesman said: “We know this is a difficult time for hospitality firms. Our Energy Bill Relief Scheme means some will pay less than half the predicted wholesale cost of energy this winter.”
The Scottish Government said: “We do not have the powers to intervene in the energy markets to address these issues. We are taking action where we can to support people and businesses through these difficult months.”
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