Strangled by taxes, costs and an ailing market, the independent cocktail bar feels an endangered business. Edmund Weil spells out the grim truths before mustering one last rallying cry.

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The truth is, since we opened our first bar back in 2010, the environment for our industry has been one of relentless, attritional pressure. A steady barrage of policy decisions and economic shifts has eroded profitability, stretched resources, and left many teetering on the brink. This crisis is – to paraphrase Hemingway – both gradual and sudden; over a decade of slow strangulation culminating in the vice-like chokehold of April’s budget.

It began early. Cast your mind back to January 2011, when VAT abruptly rose to 20%. A significant hike, and one that immediately put UK hospitality at a disadvantage compared to many European counterparts – Spain, for instance, offers a 10% rate for hospitality versus its 21% standard, and Portugal a similar 13% against 23%. This set a tone, a willingness to see our sector as a cash cow rather than a vital economic and social contributor.

Then, from 2012, came pension auto-enrolment. While the objective – encouraging saving for retirement – is undeniably laudable, its implementation added several percentage points to labour costs. For a labour-intensive industry like hospitality, this was a disproportionate burden, an early sign that policy, however well-intentioned in principle, often lands heaviest on our shoulders.

But these were mere skirmishes compared to the seismic shift of Brexit. While supply chain disruptions since 2016 have certainly raised costs and narrowed choices for European wines and spirits, the real catastrophe has been its effect on the supply of skilled workers. Free movement was, for many years, the lifeblood of recruitment, bringing some of the brightest talents to our shores. Its termination in 2020, particularly, has been devastating. The pool of skilled Europeans with the right to work here diminishes annually, and there is still no truly realistic route for new European hospitality professionals to join our job market. The much-discussed youth mobility scheme cannot arrive quickly enough; without it, we are fighting with one hand tied behind our backs.

Immigration policy

Compounding this, general immigration policy has offered little solace. There was a fleeting moment of hope, a suggestion that hiring experienced professionals at floor manager level might become feasible. Yet, the subsequent rise in the minimum salary for a Skilled Worker Visa to around £38,000 has rendered it largely inaccessible. Ironically, many of our dedicated team members earn this or more, but because tronc cannot be counted towards this salary, the visa effectively excludes anyone below assistant general manager level. Another avenue for talent, effectively barred.

And then there are the taxes. Oh, the taxes. As if the operational pressures were not enough, 2023 saw Corporation Tax jump to 25%. But the real coups de grâce, as many are now experiencing, landed this April. A rise in National Insurance for employers, coupled with a tapering of the threshold and a rise in minimum wage, landed alongside a savage reduction in the business rates discount – from 75% down to 40%. For some, like our own Oriole, this was compounded by a simultaneous revaluation of business premises. Our rateable value trebled. Combined with the reduced discount, our liability rocketed by almost 800% overnight. That is an additional £90,000 straight off the bottom line in its first year of trading post-relocation. Can we absorb that alongside every other escalating cost? The honest answer is, no, not sustainably.

What have we seen in return from government? I have a faint recollection of a VAT reduction to 15% way back in 2008-2010; a different era entirely. The financial support during Covid was undoubtedly a lifeline for many, preventing immediate collapse. Yet, years later, many businesses are still servicing the debt accrued during that period. Furthermore, high-profile initiatives like Eat Out to Help Out, or the temporary VAT reduction on food, were of limited benefit to wet-led venues like ours. The business rates relief – now being rolled back – was essential, but many would argue it merely papered over the cracks of a fundamentally unfair commercial property tax system that seems rigged against hospitality and retail.

The consistent theme? Sticking plasters. Temporary fixes predicated on an assumption that the ‘good times’ were just around the corner. They were not. They have consistently failed to materialise. Consumer confidence remains worryingly low, and there are clear generational shifts in drinking habits, trending away from regular nights out.

All these factors conspire with particular viciousness against the high-level, table-service craft cocktail bar that many of us will recognise as having formed the backbone of the UK’s cocktail renaissance. The cost of every single component required to deliver quality – skilled labour, meticulous research and development, decent premises, good equipment, premium raw materials – has skyrocketed. Yet, the price the public is willing, or able, to pay for that carefully crafted cocktail has remained static at best. Price sensitivity is acute. Even venues that appear busy, hitting their cover counts, are seeing margins wither. Those that were merely ‘getting by’ are now facing the grim prospect of bleeding out, sooner or later.

Little hope

As it happens, while preparing this piece, I asked if anyone in my network of bar owners would dare stick their head above the parapet and admit to being happy with the direction of their business right now. The silence was telling. The only affirmative whispers came from those running small, owner-operated bars, outside of London. These are businesses where the owners are not just proprietors but are on the floor, pulling pints, mixing drinks, living and breathing their venues. They have honed their operations and, indeed, their lifestyles to ensure there is no fat to trim, and in the cases I encountered, both had the considerable advantage of owning their premises outright, shielding them from one of the most crippling of overheads.

So, perhaps there is a sliver of light for the true bootstrapper. If one can find a small, affordable premises in precisely the right location, and is prepared to be the face, the engine and the accountant of the business, then yes, perhaps a living can still be carved out. It is a narrow, demanding path, far from the norm, but it speaks to the enduring spirit of enterprise.

For the rest of us, and for our industry, the broader battle for our livelihoods and for the vibrant culture we champion continues. It is a battle we desperately need our policymakers to finally recognise and meaningfully support, before it is too late for too many. While industry bodies and prominent individuals advocate powerfully on our behalf, there is a persistent sense that the specific, nuanced needs of independent venues are not always fully heard in the corridors of power, where the voices of larger corporate groups can often dominate. So, what more can we, as independent operators, do beyond the obvious first step of writing to our local MPs?

First, collective local action can amplify our voices. Consider forming or joining local alliances of independent hospitality businesses. A unified local front to councils, BIDs, or Local Enterprise Partnerships carries more weight.

Second, engage directly with local governance. Attend council meetings where licensing or local economic strategy is discussed. Your first-hand experience is compelling evidence.

Third, and finally, while larger trade bodies such as UK Hospitality may seem focused on broader strokes, engage with them actively. Ensure your specific concerns as an independent are clearly communicated. More independent voices from membership and beyond help them represent the full spectrum of the sector.

This is no longer just about weathering the storm – it is about demanding a fairer climate in which to operate. The fight can feel exhausting, but our collective voice, particularly when amplified by tangible action and shared experience, is a tool we must wield with more focused intent.