East Anglia remains a UK blackspot for pub and bar closures and may not be over the worst, according to a report from Grant Thornton.

Falling alcohol sales, changing consumer habits and government crackdowns are all driving trade away.

Figures from the British Beer & Pub Association show that 1,300 pubs closed last year with a loss of 13,000 jobs. Of these, 137 were in East Anglia – the third worst-hit region in the UK behind London (276 closures) and the North West (169 closures).

Although the rate of pubs and bars closing in 2010 was down from 40 per week in 2009 the situation remains worrying, says Grant Thornton.

Licensed businesses contribute £256 million and £241.7 million a year to Norfolk and Suffolk’s economies, respectively, so the financial impact of closures is considerable.

Grant Thornton says that, contrary to popular belief, overall alcohol consumption per head of population in the UK is falling at the fastest rate for more than 60 years. The latest figures available from the first half of 2009 saw consumption fall by over eight per cent in relation to the same period of 2008.

The report also suggests that we are turning into a nation of stay at home drinkers with on-trade sales of alcohol declining both in absolute terms and as a percentage of overall alcohol sales. In the first half of 2010, on-trade sales of beer accounted for 53 per cent of the market compared to 47 per cent off-trade.

Grant Thornton East Anglia’s recovery and reorganisation partner Ian Carr, said: “The growth in ‘home drinking’ has partly been driven by the increasing gulf between on-trade and off-trade alcohol prices.

“The cost of an average pint in British pubs hit £3 at the beginning of the year and at the current rate of inflation, will top £4 per pint by 2018. This compares to some supermarkets which, according to the Campaign for Real Ale (CAMRA), charge as little as 47p per pint. These superstores are rapidly taking trade from both pubs and traditional off licences.”

Despite an overall fall in alcohol sales, Britain has been declared the ‘binge-drinking’ capital of Europe and in response to this, the Government published a consultation paper last summer containing proposals to crackdown on problem premises, ban the sale of below cost drinks and review alcohol taxation.

These measures will most likely have the biggest impact on traditional ‘town circuit’ bars, a sector of the market which is already under strong pressure with 248 outlets (18 per cent) closing in the first half of 2009.

The report also claims that increasing customer expectations for pubs to serve good food in a stylish and/or family-friendly environment have contributed to the downfall of many older and traditional ‘wet-led’ outlets.

Although sales of pub and bar food as a share of the eating out sector has actually fallen since its peak in 2007 from 23 million meals to 19 million meals per week, multiple operators have moved quickly to focus on food-led brands while tenanted and leased pubs have struggled to compete.

Suffolk brewing company Adnams, which owns pubs in Suffolk, Norfolk and Essex, agrees that all these factors are contributing to difficult times for the sector but stresses that the picture is not all bad for the region’s licensed businesses.

Stephen Pugh, Adnams Finance Director, said: “There is no doubt that the pub sector is under pressure, but we must also recognise that there are many successful pubs operating throughout our region. Grant Thornton’s report highlights the significant contribution pubs make to the economies of Norfolk and Suffolk and many licensees have adapted their offer to suit a changing market.”

Ian Carr concludes: “It is good news that the rate of pubs and bars closing has decreased from 2009 but we have still seen a significant number of corporate failures over the past three years, from the UK’s sixth largest pub company Admiral Taverns to a swathe of smaller, independent operators.

“We predict that through the second half of 2011 we will be likely to see an increase in distressed corporate sale transactions as companies are forced to raise cash, outweighing their reticence to sell on a depressed market.

“As the current economic, political and regulatory environment looks unlikely to improve over the next 12-18 months, it is important for any licensed business experiencing the first signs of stress to seek specialist advice, sooner rather than later.”