Pubs and restaurants revolt over rates rise: Britain’s high streets face losing some of their most popular pubs and restaurants because of big rises in business rates, chancellor Philip Hammond has been warned. Companies including Azzurri Group, Casual Dining Group, PizzaExpress, Greene King, Wagamama, Mitchells & Butlers, Stonegate, Young’s and Fuller’s have written to the chancellor to ask him to rethink a plan under which some outlets will be hit with a 42% increase in their rates this year. There have been complaints from across the business world over the rates, which have also caused concern among Tory MPs worried about closures on high streets in their constituencies. Independent outlets feel particularly vulnerable and businesses are asking that Hammond use his budget next month to reduce the huge increases. Pub and restaurant chains directly employing more than a million people have signed a letter to the chancellor, warning that the rises some are facing will damage their ability to help to make a success of Brexit. They state many companies in the hospitality sector were “not prepared for the significant rises resulting from the latest revaluation”. They wrote: “This will add a further £300m to £500m in additional cost in the hospitality sector. Margins in our sector are already under intense pressure, due to the cumulative impact of increased wage, training and regulatory costs and there is a very real danger that these increases will result in a freeze in investment and a scaling back of new openings and job creation. We have already seen evidence of outlets closing as a result of the planned increase. Modern pubs, bars and restaurants are valuable social, economic and community assets – they contribute to our thriving tourism sector, high street regeneration and attract and support significant inward investment. As such, they are well placed to capitalise on the opportunities presented by Brexit, but they will not be able to do so if hampered by unsustainable additional costs.” The new business rates will apply from April. Ministers have also lifted the cap on the amount by which bills can increase in the first year from 12.5% to 42%. Some pub landlords have claimed they are facing eventual increases of as much as 516%. All businesses with properties that have a so-called rateable value above £12,000 have to pay business rates. The last time rates were set was seven years ago, but property price changes since then have led to big winners and losers. Rates will fall for 920,000 businesses, remain the same for another 420,000, and increase for 510,000. A spokesman for the Department for Communities and Local Government told The Times: “The great British pub is a national asset, providing thousands of jobs and boosting the economy by £21bn a year. The method of valuing pubs was agreed by the five major trade bodies and has not changed. Following the revaluation, three quarters of properties will see no change or even a fall in their bills, and the small minority of businesses that face an increase will benefit from our £3.6bn transitional relief scheme.” The chains that have written to Hammond said: “We would urge you to consider reviewing the transitional relief provisions and the introduction of sector-specific hospitality retail relief to help businesses plan and invest with confidence.”

 

Greene King hires apprentices to brew beers that appeal to younger drinkers: Brewer and retailer Greene King is hiring apprentices to help it create new ales that appeal to a younger audience. The company has set up a brewing venture at its plant in Bury St Edmunds called the Craft Academy, where apprentices will spend 18 months learning about brewing, design, marketing and sales. The first apprentices have already started. Dan Scott, 24, was previously a junior publicist in the music industry and worked as a sales assistant in a craft beer bottle shop while Nancy Nangle, 25, combined working in London hotels with brewing her own beer at home. The duo, working under the guidance of three experienced Greene King hands, led by development and project brewer, Ross O’Hara, have already helped to produce a series of five new brews, including Over Easy, a 3.8% strength IPA, and High & Dry, a 5% dry hop lager. The beers, whose style and packaging design is aimed at the younger market, are being sold in more than 100 free trade pubs and they will shortly go on sale in 170 Greene King pubs. The plan is eventually to expand distribution into the off-trade. They are being brewed at the micro-brewery built by Greene King in 2015 alongside its main brewery to enable it to be more experimental and innovative as it seeks to tap into the craft beer revolution. Chris Houlton, managing director of brewing and brands at Greene King, told The Times: “The Craft Academy gives young people the chance to learn in-depth about each component of the brew process, right from creating the recipe and designing the branding to marketing and selling the beers.” The first two recruits, chosen from more than 100 applicants, will work towards a Level 3 NVQ qualification and Greene King chief executive Rooney Anand said the plan was to find them permanent jobs once they had completed the course. Anand said young people were “drinking less volume but higher quality”, adding: “They don’t want to drink bland and these are some of the most interesting beers we’ve ever launched.” Greene King has taken on about 9,000 apprentices since 2011.

 

Heineken agrees deal with Kirin to acquire Brazil business: Heineken has agreed a deal with Kirin Holdings to acquire its Brazil business. The total consideration to be paid to Kirin for the shares is €664m, corresponding to an estimated enterprise value of €1,025 million for Heineken. Upon completion of the transaction Brasil Kirin will be consolidated with Heineken. Heineken stated: “Heineken has entered into an agreement with Kirin Holdings Company to acquire Brasil Kirin Holding SA, one of the largest beer and soft drinks producers in Brazil. The transaction will transform Heineken’s existing business across the country by extending its footprint, increasing scale and further strengthening its brand portfolio. On closing, Heineken will become the second largest beer company in Brazil, with a stronger commercial platform from which to capture future profitable growth in an exciting beer market. Brasil Kirin is a large beer producer in Brazil, operating 12 production facilities with its own distribution network. It has a particularly strong presence in the north and north east, where Heineken currently has less exposure. It owns an extensive portfolio of beer brands and its share of the Brazilian beer market in 2015 was circa 9%. The portfolio includes Schin, one of Brazil’s largest brands covering the mainstream and value segments, as well as the Devassa brand. Furthermore, it owns the speciality brands Baden Baden and Eisenbahn, which will complement Heineken’s existing premium portfolio. Brasil Kirin also has a soft drinks business comprised of carbonated drinks, bottled water and other beverages. The soft drinks portfolio, which has around 2% market share, includes the iconic Itubaína brand. Heineken Brazil is in the process of reviewing its future route to market and will provide further detail when appropriate.” Brasil Kirin today reported full-year results for the year ended 31 December 2016 with revenue of BRL 3,706m (2015: BRL 3,698m) and an operating loss before amortisation of goodwill of BRL 262m (2015: BRL 322m. Jean-Francois van Boxmeer, chairman and chief executive of Heineken, said: “This transaction marks a step-change in scale in an exciting beer market, building on our success to date in the premium segment and strengthening our platform for future growth. It reiterates our commitment to the Brazilian market and confidence in our ability to generate attractive returns over the long-term across all segments of the market. I look forward to welcoming our new colleagues from Brasil Kirin into Heineken and working with them to take the combined business forward.”