Marston’s has blamed new nationwide coronavirus restrictions for job cuts.
MARSTON’S
Shares in British pub group Marston’s dropped almost 7% on Thursday, after it said up to 2,150 jobs were at risk as a result of the new coronavirus restrictions, highlighting the financial toll the pandemic has taken on the country’s struggling hospitality sector.
Marston’s MARS, -3.56%, which is known for its Pedigree and Lancaster Bomber beers, said it would start a full review of costs, as it posted a 30% drop in annual sales.
The company blamed the new nationwide measures, which include mandatory table service, a 10 p.m. curfew, and limits on group sizes across the country, for the job cuts, calling them “hugely disappointing.” It added that there was a lack of evidence linking pubs to the recent spike in coronavirus infections in the country.
“Inevitably, and regrettably, recent restrictions will impact jobs,” said Marston’s MARZF Chief Executive Ralph Findlay in a trading statement on Thursday.
Shares in Marston’s, which are down more than 60% so far this year, were 6.74% lower in London morning trading.
On Monday, the government unveiled a three-tier system of restrictions for England to try to curb the spread of coronavirus. The system classes areas as being on medium, high or very high alert.
A 10 p.m. curfew on pubs, bars and restaurants has been in place across the whole of England since September. However, the government is now set to shut pubs and bars in “very high” alert areas, with those in Liverpool closing this week.
Hospitality-staff members are now required to masks, with the penalty for not wearing one, or breaking the ”rule of six,” doubled to £200 for a first offense.
On Thursday, Marston’s said its deal to merge its brewing business with the U.K. arm of Carlsberg CARL.A, -1.05% is expected to complete at the end of October, and will contribute to a further reduction in net debt.
News of Marston’s layoffs comes just two days after Mitchells & Butlers MAB, +0.45%, which owns about 1,700 pubs and restaurants, including the All Bar One and Harvester brands, started redundancy consultations with staff, blaming curfews and the lack of government support for the decision.
Last week, rival pub group Greene King, which is owned by Li Ka-shing’s CK Asset holdings 1113, -2.34%, announced plans to permanently close one-third of its venues and cut 800 jobs.
A spokesperson for Greene King said: “We urgently need the government to step in and provide tailored support to help the sector get through to the spring and prevent further pub closures and job losses.”
Earlier this week, UKHospitality Chief Executive Kate Nicholls said the impact of all of these restrictions is huge and “we are quickly reaching the point of no return for many businesses.”
She urged the government to rethink the mandatory 10 p.m. curfew on those areas where COVID rates are low. “It was imposed without credible evidence that hospitality is the source of increases in transmission, while some evidence points the other way. To leave hospitality out to dry would be a grave and risky move and would cost many people their jobs,” Nicholls said.
Separately, on Thursday, the pub business owned by Heineken HEIA, -2.35% was fined £2 million by the industry watchdog for forcing tenants to sell “unreasonable levels” of its own beers and ciders.
Star Pubs and Bars, which leases 1,900 pubs across England and Wales, “seriously and repeatedly” broke rules for three years, the Pubs Code Adjudicator said. It found that several pubs who had asked to no longer be tied to Heineken were told that 100% of the keg beer they sold had to be Heineken brands.
Star said it was considering an appeal against the fine, which it called “unwarranted.”
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