Supermarkets Beating Pubs and Bars in the UK Alcohol War

Small and independent alcohol retailers should be concerned by a new study which found the number of failing bar and pub companies has risen by over 30 per cent.

According to accountancy firm Wilkins Kennedy, 130 bar and pub companies went bust during the third quarter of 2010, compared with 99 during the same period the previous year.

These include Gordon Ramsay’s pub, The Devonshire, which – despite £5million in funding – shut down after just three years of trading, and City of London retailer Balls Brothers who were forced to close all 19 of their pubs and bars in November.

The sector has taken a clobbering over the past 12 months with heavier taxation and new legislation that makes it easier for local residents to challenge opening hours.

The government’s Police Reform and Social Responsibility Bill, which came into force last month, is a further hindrance as it punishes bars and pubs with a £4,500 fine for serving alcohol after midnight without a proper licence.

But even more worrying, is the lack of support shown by lenders as it leaves the industry vulnerable to competition from supermarkets.

Over the past decade, Sainsbury’s have traditionally been serious paymasters to government and subsequently helped supermarkets monopolise the price of alcohol.

Supermarkets have cosied up to government ensuring that successive administrations did not implement legislation that would harm their interests and curtail the likes of Tesco, Asda and Morrisons from selling alcohol, purely as a loss leader to pull in customers; knowing they will purchase other goods.

The sector has been weakened by the smoking ban and easy access to cut-price imported booze, but supermarkets have caused serious harm to the bar industry and convenience stores who say they can only compete by opening 24 hours a day.

Labour has Sainsbury’s and Tesco as benefactors, while former Asda chairman and MP Archie Norman has supported the Tories for over 20 years.

In contrast, smaller alcohol retailers aren’t united and don’t lobby government.

And even if they did lobby, because they’re not dropping millions into government coffers to help fight election campaigns, their petitions would fall on deaf ears.

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