Friday five: the week's top news
- Pubs, bars and restaurants in Wales have been banned from selling alcohol and must now close at 6pm every evening under tough new Coronavirus restrictions. First Minister Mark Drakeford set out the new restrictions earlier this week, and they subsequently came into force on Friday (4 December). It comes less than one month after hospitality businesses across the country were given the green light to reopen following a 17-day 'fire-break' lockdown. The measures will be reviewed on 17 December. Drakeford also announced that targeted financial support would be made available to help businesses weather the impact of the measures. The Welsh Government will provide £340m in grants to support businesses affected by the new Covid-19 restrictions, including £180m that will be targeted at hospitality, tourism and leisure businesses. It will provide grants of up to £100,000 for SMEs and £150,000 for larger businesses.
- The Prime Minister has announced that wet-led pubs forced to remain closed under Tier 2 and 3 restrictions will receive a paltry one-off grant payment of £1,000. Confirming the new funds in a statement to the House of Commons earlier this week, Boris Johnson said the money was intended to recognise how hard pubs have been hit by Covid restrictions during what would typically be their busiest time of year. He added that MPs understood and appreciated the 'anguish' of pub operators, claiming that the Government would do 'everything in its power' to support the hospitality sector. However, voices from across the industry immediately lambasted the grant sum, which equates to roughly £32.26 per day. Simon Emeny, the chief executive of brewers Fuller, Smith and Turner, said the one-off payment will not be enough to save many wet-led pubs; while the Campaign for Pubs described the payment as 'derisory'.
- UKHospitality has called for the establishment of a Hospitality and Tourism Recovery Fund to support hospitality businesses that have not received any grant support and are at risk of closure. The move follows the news that supermarket Tesco will repay £585m of grant support to the Government. The supermarket giant says it is looking into how it return the total sum of money granted to it in the early stages of the Coronavirus pandemic, and that the potential risks it faces from Coronavirus have passed. Speaking about Tesco’s move, Kate Nicholls, UKHospitality chief executive says: “It is an admirable and altruistic gesture from a company that is clearly in a much better financial situation than the vast majority of the those in hospitality. The question now is what happens to this money, which the Government had intended to invest in supporting businesses."
- Healthy fast food chain Leon has served creditors with a two-year restructuring plan that will see the majority of its estate switch to a turnover-based rent model. The group circulated details of a Company Voluntary Arrangement (CVA) to landlords and lenders earlier this week. The CVA will be in place for two years and see four of Leon's restaurants move to a rent-free model. However, the majority of its 60 outlets will switch to turnover-based rents. As part of the restructuring, Leon’s shareholders would inject £3m into the company if its cash reserves fall below £2.25m for more than 28 consecutive days. The CVA, which requires creditor approval, is not expected to trigger any store closures or job losses among Leon’s 650-strong workforce.
- Business leaders across the UK food and drink industry remain unclear on the impact that Brexit will have on their business over the coming 12 months, despite the looming Brexit deadline. According to Lumina Intelligence’s new Top of Mind Report 2020/21, 56% of hospitality business leaders stated that they were unclear about the impact on Brexit, with a further 12% saying they ’don’t know’. Less than a third of respondents in the poll felt clear on the impact Brexit would have on their business in the coming year. “We have no clarity on whether there will be a deal and the resultant impact on our supply chain is therefore unknown,” one hospitality operator commented In addition to a lack of clarity surrounding the impact of Brexit on their business, import tariffs are the top concern amongst both grocery retail and eating out business leaders. Leaders remain concerned about the additional costs to be incurred from cross border tariffs, in addition to the availability of goods from the EU, with respondents saying that menus will have to be adapted as a result.
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