The CEO of Brewdog has warned that drinkers could pay an eye-watering £27.50 for a pint if the company raised prices to match the soaring energy bills. James Watt slammed the Government this week for having “no strategy” when it comes to saving “tens of thousands” of businesses struggling with the soaring costs of gas. Over the past year, households and businesses have faced the worst impacts of a global fossil fuel energy crisis, triggered by Russia’s invasion of Ukraine. Despite some Government support, Mr Watt warned that many businesses would not survive 2023.
In a Linkedin post, he wrote: “Would you like to pay £27.50 for a pint of Punk IPA? Nope, I didn’t think so. But that’s how much you’d be paying in BrewDog York, for example, if we’d put up prices in line with our soaring energy bills.
Or how about £48.75 for a burger and fries? Businesses all over the UK are facing the crippling combination of the worst cost inflation for decades and squeezed consumer spending power.
“Jeremy Hunt will make the situation worse when he rows back support for business energy bills from April. We’re only in the foothills of a crisis which poses a far bigger threat to companies than C[ovid]-19.
“The sad reality is that there are many great businesses that simply will not survive 2023.”
Mr Watt warned that while the economic climate was extremely challenging for his company, they had the scale and the backing to survive the high prices, adding “Many smaller businesses aren’t so lucky.”
He noted that Government “threw the kitchen sink” while dealing with Covid, but unless it acted quickly “tens of thousands of businesses vital to employment and our economy will wither and die.”
He continued: “People inside government KNOW this. Not all of them are career politicians who’ve never done a day’s work in the ‘real world’ of business. This government has no plan, no ambition. People talk about a lack of industrial strategy. It’s far worse than that. There is no strategy full stop.”
“Why would anyone start a business in the UK today? I’ve seen more breweries, bars and restaurants than I can name go out of business in the past few months and that trend is only going to accelerate.
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He added that according to idnustry estimates, up to 70 percent of the UK’s bars, pubs and restaurants could be forced to close, saying “Every one that fails is an arrow in the heart of the sector.”
To tackle the crisis, he urged the Government to slash business rates in half for year, or scrap them entirely, calling them an “antiquated” system.
He also urged the Government to cut taxes further, slamming employer’s contribution as “a tax on hiring and growth” and urging them to issue a VAT holiday for hospitality for a year.
He said: “Everybody will be cutting back on budgets but every little helps. Pubs and bars like ours are vital parts of a community and we need to protect them.
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“Get a grip on strikes. Cut a deal rather than trying to ban strikes. The knock effect on hospitality from the rail walkouts came at exactly the wrong time. The strikes in December alone cost our business over £1m.
“State-backed loans to protect the really small guys who could disappear completely? with repayments starting in 12 months’ time. If this means spending a bit more money to support business through this nightmare now, it’s better than spending the money on unemployment benefits if thousands of businesses go under.
“Without more help, we’re sleep-walking towards utter disaster for the tens of thousands of businesses in the UK.”
Last September, the Government announced the Energy Bill Relief Scheme, which supports businesses and public sector organisations such as schools and hospitals by providing a discount on wholesale gas and electricity prices.
