Greene King boss: Pub industry ‘reaching breaking point’

Jonathan Fearn, the finance chief of Greene King pub chain, has warned that the UK’s hospitality industry is facing its “breaking point” due to soaring taxes and employment costs. These costs have made it increasingly difficult for pubs to run their businesses effectively. Speaking in This Is Money, Fearn called on Chancellor John Healey to take action on a number of rising costs, including business rates, national insurance, and VAT.

Since 2019, inflation has added £400 million to Greene King's business costs, with hourly pay increasing by over 60% and electricity, gas, and water bills rising by half. Greene King's annual business rates bill is £60 million across its 1,500 pubs, according to Fearn. Research by the British Beer and Pub Association shows that a pub only makes 12p profit from each pint sold, highlighting the industry's thin profit margins.

Fearn welcomed the Prime Minister's decision to cut business rates for pubs by 20%, saving each pub about £1,100. However, he emphasized that this measure is negligible compared to other cost pressures and is likely to be offset by rising wage inflation. Fearn urged Healey to tackle the youth unemployment crisis, which he believes is particularly challenging for an industry that traditionally provides a first step into work.

He also called for a reduction in VAT on the hospitality industry from 20% to 10%, as Greene King and other pub groups like JD Wetherspoon have advocated. Fearn stressed that the industry is reaching its breaking point due to the cumulative impact of rising costs, and he called on the Chancellor to provide relief through budgetary action, enabling pubs to invest in improvements, hire staff, and grow.