THE DECLINE OF THE PUB AND BAR INDUSTRY WITHIN LONDON

The Decline of the Pub and Bar Industry within London

The Decline of the Pub and Bar Industry within London

Introduction

In a move to highlight the impact on inbound tourism by the massive increases to Air Passenger Duty (APD), BAR UK has written to all 156 National Olympic Committees outside of Europe alerting them to the substantial increase in travel costs and inviting them to express their concerns to their relevant British Embassy or High Commission (Aaker 2007).

The Board of Airline Representatives in the UK (BAR UK), representing 93 airlines, has become increasingly frustrated with the Governments apparent disregard to the concerns by travel and tourism industry experts over the excessive increases in taxation.

Aim of the Study

The British pubs and bars have taken a hammering in recent times. The British Beer & Pub Association (BBPA) reported that as many as 52 pubs were closing each week. The “perfect storm” describes the combination of high rents, beer ties, recession, and supermarket pricing of alcohol, the smoking ban and the change in drinking habits that has conspired against the industry to force this unprecedented rate of closures. (White 2009, p. 22) Many analysts believe the sector's problems actually stem from the corporate structure of the large pubcos and the way they are funded. (White 2009, p. 22)

The history of British pubs dates back over 300 years well before the Beer Act 1830 was introduced. For centuries it has been providing a venue for socializing for the local residents and business communities, and for tourists who might be curious about the British pub culture. Further British beers are renowned worldwide for their unique tastes. There has been a distinct increase in British beer drinkers who believe the best taste of beer comes when it is served from the pump.

Rationale of the Study

However, the imposition of smoking ban by the last Labour government has to a certain extent accelerated the decline of British pubs and bars. The decline of the British pubs and bars coincided with the property boom in mid 2008 when the smoking ban was introduced. Many freeholders who had many years of experience knowing that the pub industry will face financial difficulties had taken this opportunity to sell out and leave this industry. At that time the last Labour government introduced the Entrepreneurs' relief for Capital Gains Tax. This enabled property owners to qualify for such a relief when they disposed of their business assets at a gain. The relief was given at an effective rate of 10% on the first two million pounds of the net gain which is financially beneficial in comparison with an income tax rate of 40%. Consequently this has contributed to the sad loss of the soul and heart of the British community, especially in rural areas (Ceserani 2004).

However the smoking ban in pubs is not without its benefits.  The days of a smoky atmosphere and odorous pubs and bars are long gone, which is much appreciated ...