The reform of the licensing laws will cost the industry £1b and, combined with other rising costs, contribute to the closure of a large number of pubs, Kent-based brewer and pub operator Shepherd Neame has warned.
Vice-chairman Stuart Neame said he feared that the licensing reforms would cost businesses an average £5,000 a year and lead to tens of thousands of costly licence reviews being heard by local authorities across the country.
Neame said the new laws would allow neighbours to demand these reviews over the smallest infringement of a licence, such as serving one person after permitted hours.
"At least half will lead to some restrictions on the licence, and closure remains a possibility," he predicted.
Beer duty, the national minimum wage and the recent 22% leap in Sky TV subscriptions were also taking their toll on the trade, he said, with community pubs under particular pressure.
JD Wetherspoon revealed in its annual figures last month that licensing reform had already cost it £1m and curtailed its expansion plans and independent operator Denis Watkins, owner of the Angel Inn at Hetton in North Yorkshire, also agreed with Neame's prognosis. "I was concerned as soon as I heard that licensing would be brought into the hands of local authorities, where the issue stands a very good chance of becoming political," he said.
Watkins was concerned that small-minded members of the public in both town and country would seize the chance to object to licences and that many pubs would fall by the wayside as a result of the costs and the reviews.
Matt Jackson, proprietor of real ale pub the Water Witch in Lancaster, felt Neame had given a worst-case scenario, but he also anticipated an explosion in vexatious licence reviews that would cost large sums in legal fees and hit small, independent traders most severely. "If you have a Victor Meldrew living next door to you, you've had it," he forecast.
Despite rising costs, Shepherd Neame reported its 28th consecutive year of profit growth for the year to 28 June. The group, which operates 366 pubs in the South-east of England, boosted pre-tax profits by 43% to £8.7m on turnover 7.3% ahead at £84.5m. Its 298 tenanted pubs, the biggest contributor to profit, increased profits by 7.5% and like-for-like profits by 5.5%.
Turnover at its managed pubs grew by 11%, while like-for-like sales increased by 8%. At the year-end, the group's pub estate operated 183 bedrooms, a tally that has grown to 240 since the end of July.
Source: Caterer & Hotelkeeper magazine, 16 - 22 October 2003