Rising Business Rates Will Push Welsh Pubs to the Brink

The Six Nations rugby tournament is just around the corner – a time when many of us will be heading to pubs and bars up and down the country to meet friends, have fun and cheer on the Welsh team.

But there isn’t much to cheer about in the hospitality industry at the moment, with the increased cost of living, energy prices on the up, not to mention the rise in the national minimum wage and National Insurance in the past few months. Times are really tough.

And it’s about to get even worse for Welsh pubs, hospitality and brewing businesses, as many will see a sharp rise in their business rates this April. Many pubs have reported seeing their rates double, if not triple, adding even more financial pressure on these businesses. Estimates are that Welsh pubs and hospitality businesses will see a projected 23% increase in 2026/27, 51% in 2027/28 and 80% by 2028/29, compared with current levels.

These increases are being driven by the Valuation Office Agency updating rateable values for bricks and mortar businesses, and the fact that pubs and hospitality are excluded from the Welsh Government’s business rate reform. These rate increases are therefore more than for any other sector.

Also, we’re not on a level playing field here in Wales, as small businesses start to pay business rates for premises with a rateable value of £6,000 in Wales compared to England where it’s they start at a rateable value of £12,000. So, the smallest businesses in Wales are squeezed even more than they are in England.

While the Welsh Government has announced that high street retailers will get a lower multiplier, pubs, restaurants and breweries have not been offered the same relief. In fact, some independent brewers aren’t given any rate relief at all.

Business rates are a fixed cost – one that has to be paid before any wages are paid, any product is poured, and any lights are even turned on – and a fixed cost, that I fear, will be for many pubs the final nail in their coffin.

The hospitality industry has already warned Government that the increase in the national wage, National Insurance, and fewer people going out to socialise, all means that jobs will be cut, pubs will reduce opening hours, and many will close.

When so many business decisions are made by the UK Government, the knock-on effects of these policies (NI, minimum wage, employer responsibilities) are even more exaggerated for small businesses when combined with less favourable Welsh small business relief.

As someone who works in brewing and represents the industry, I see how it will affect our business two-fold. We still have to pay the higher business rates, but we will also have a diminishing customer base as more pubs and venues close their doors due to increasing costs.

As the Welsh Director of Society of Independent Brewers and Associates, we have been campaigning along with other business groups, for hospitality business rates to be based on trading realities rather than just the square footage of a building alone. The Welsh Government seems to cushion other sectors, but leave pubs, restaurants and brewers behind. This combination means Welsh pubs and breweries are paying more for less support, at a time when underlying costs are rising across the board.

So, as you sip your pint and cheer on the men in red, enjoy every minute as I worry that many Welsh pubs and brewers won’t be around for the next Six Nations tournament. Unless action is taken, and soon, to help this sector with these business rate increases, as well as the rest of the increasing costs, more and more venues will be closing their doors for good.