Insolvencies in the licensed trade dip – but are still at recessionary levels

10th August 2010, 11:14am

The latest UK insolvency figures show that insolvency levels remain high in the pubs, clubs and bars sector – with administrations falling slightly but liquidations still high.

Commenting on the figures, Mark Wilson, partner at Baker Tilly Restructuring and Recovery LLP, said: "This quarter's insolvencies levels in the licensed trade may be a modest fall on Q1 2010 numbers, but are still as high as they were in Q1 2009 at the peak of the recession.

"What is interesting is that Company Voluntary Liquidations (CVLs), still remain high with a 10% increase from Q4 2009 to Q2 2010. Although there has been a slight decrease in numbers from Q1 to Q2 2010. Administrations have nearly halved since Q4 2009 and the use of Company Voluntary Arrangements (CVAs) has remained relatively low.

"Pub drinking declined sharply in 2009, with 11 pubs closing every week in London alone, according to figures from the British Beer and Pub association (BBPA) – and hit other regions hard. Whilst beer sales are up 2.9% overall, according to the latest UK Quarterly Beer Barometer, behind this figure, supermarket sales rose almost 14% whilst pub sales fell 6.3%.

"The industry should remain cautious, particularly as the sector has been put on notice for the impending VAT hike. While they have been given time to prepare, there is likely to be some impact once this bites in the new year."

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