Pubs face widespread closure unless the Chancellor announces an extension of business rates relief in next week's Budget. The UK's largest advertising company has warned.
David McDowall, boss of the Stonegate Group, whose pubs include Slug & Lettuce, Yates's and Walkabout, said thousands of landlords currently make just 12p profit for every pint of beer they sell.
Business rates support for the hospitality sector in England and Wales is set to expire in April.
Mr McDowall said if it was scrapped, small publicans would see their business rates bill quadruple from April.
Along with other costs businesses face, he fears that “they have nothing left to give.”
Rate relief was introduced for pubs, restaurants, bars and cafes in 2020 in response to the Covid pandemic when businesses were forced to close.
In the November Budget last year, the then Chancellor Jeremy Hunt announced that the Budget was being extended until April next year.
The measure means businesses in England can claim a 75% reduction on business rates up to £110,000, or 40% for businesses in Wales.
Mr McDowall told the BBC's Today program that the hospitality industry has faced a “barrage” of challenges in recent years.
These include the Covid recovery, but also high inflation, energy costs following Russia's invasion of Ukraine and the effect of the cost of living on customers.
“Removing this rate relief completely would prove very, very costly for pubs, bars, restaurants and cafes across the whole of the UK,” he said.
The British Beer and Pub Association recently revealed that owners make a profit of 12p per pint. The average price of a pint of draft lager was £4.79 in September, according to the Office for National Statistics.
Mr McDowall is one of several representatives from the hospitality industry who signed a letter to Chancellor Rachel Reeves this week calling for an extension of the relief.
He warned of “skyrocketing business rates” facing businesses 153 days after the Budget was presented.
On Thursday, Hospitality UK and the British Retail Consortium, whose members also benefit from relief, said that in the year to March, businesses in these sectors paid almost £9 billion in business rates .
This represents almost a third of the total amount of revenue the government raises from business rates.
They said if the support was removed it would cost hospitality and retail an extra £2.5 billion.
Earlier this week, Hospitality UK also called on the Chancellor to stick to Labor's manifesto pledge to reform business rates.
The amount businesses pay is based on the amount of annual rent that could be charged on the premises, called assessed value.
Hospitality UK argued that as its businesses are generally in central locations such as high streets, the cost to businesses is high.
Without reform, “investment in our high streets will be reduced, job opportunities will be wasted and ultimately we will see higher levels of business failures,” he said.
The Treasury has been contacted for comment.
