The chief executive of Greene King has called on the government to overhaul the “unfair” business rates system, urging a shift from turnover-based calculations to a profit-linked model to better support the struggling pub sector.
Nick Mackenzie, CEO of the pub and hospitality giant, said the current structure—where pubs are taxed on the assumed turnover of their properties rather than actual profitability—was hastening the decline of high street pubs, many of which are already operating on razor-thin margins.
His comments follow the company’s annual results, which revealed a £147 million pre-tax loss in 2024. Greene King, which operates more than 2,600 pubs, restaurants and hotels across the UK, blamed a cocktail of rising costs and outdated taxes for the poor performance.
“Pubs are going to be around for the long term, but we need to address the unfairness in the system to allow them to flourish,” Mackenzie said.
“It isn’t fair that the sector has just 0.4% of the UK’s rateable property but pays 2.1% of the bills. The pub trade is a major employer and a vital part of the fabric of our communities, and it’s time the tax system reflected that.”
The British Beer and Pub Association (BBPA) has warned that the UK could see more than one pub closure per day throughout 2025, following 350 net closures in 2024. Business rates are cited as a key driver behind the trend, alongside higher operating costs, energy prices, and tax hikes.
Under the current system, business rates for pubs are calculated using “fair maintainable turnover”—a measure of how much a pub should sell annually based on its location and capacity, not what it actually earns. This has left many loss-making pubs saddled with large tax bills regardless of their financial performance.
The issue is compounded by recent cuts to business rates relief. During the pandemic, the hospitality sector benefited from 75% relief, which was slashed to 40% in October’s budget by Chancellor Rachel Reeves. The change affects more than 252,000 venues—including pubs, cafés, restaurants, and entertainment businesses—adding an estimated £545 million in extra costs, according to Altus Group.
Mackenzie also pointed to the rise in employer national insurance contributions as another blow, especially for labour-intensive businesses like pubs. Unlike corporation tax, this cost is levied irrespective of profitability, further tightening margins for venues already in the red.
Emma McClarkin, chief executive of the BBPA, joined the calls for reform, warning that without urgent intervention, the country risks losing one of its most iconic industries.
“It has never been more urgent for government to overhaul the outdated and unfair business rates system,” she said.
“Our sector makes a huge economic contribution and holds priceless cultural value, yet it remains one of the most highly taxed industries in the UK.”
The warning comes amid wider cost pressures on the hospitality trade, including persistently high energy prices and new fees for recycling glass. Many operators now fear that without significant tax reform, thousands of pubs and brewers could disappear permanently—undermining local economies, community cohesion and British culture itself.
Labour has so far stood by its cuts to relief, positioning them as part of a broader fiscal reset. But with the sector raising the alarm over irreversible damage, pressure is mounting on the new government to rethink its approach—or risk presiding over the rapid decline of the British pub.
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Tax pubs on profit, not turnover, says Greene King boss as industry battles mounting closures