Marston’s secures £70m coronavirus funding package

15-May-2020 - Last updated on 19-May-2020 at 14:45 GMT

Marston's has secured funding to help it weather the coronavirus

Related tags coronavirus Drinks Finance

The ongoing coronavirus crisis has forced brewing giant Marston’s to agree £70m of additional liquidity through an increased bank facility, as it waits for pubs to reopen.

Marston’s hopes the additional funds – plus continued Government support on employment costs, deferred tax payments, rent and rates relief and income from beer sales into the off-trade – will help the brewer meet its financial obligations.

If confirmed, funding would also give Marston’s financial stability should pubs remain closed for the rest of the year due to the coronavirus – a measure that it predicted would impact its future results.

In a statement submitted to the London Stock Exchange, Marston’s made clear the negative effect of the ongoing coronavirus crisis to its business.

Uncertainty remains

“The impact of COVID-19 on our financial and trading performance will depend upon how the situation develops and over what timescale, which remains uncertain,” read the statement.

“The Government has recently announced a recovery strategy to lift lockdown restrictions in phases, including the potential for pubs to reopen in early July. However, this timing is by no means certain and is, of necessity, subject to meeting targets relating to containing the virus and the ability to meet 'Secure COVID-19 guidelines'. We await more detail from the UK Government in due course.”

Marston’s has also announced, much like many other food and drink firms, that there were no plans for a final dividend for the financial year 2020.

The brewer’s pursuit of funding follows claims the continued lockdown has forced UK pubs to scrap more than 70m pints of beer, which would be unfit for consumption by the time they reopen.

£265m in lost sales

This estimate by the British Beer and Pub Association (BBPA) would be equal to £265m in lost sales – based on an average cost of £3.79 per pint, according to 2019 figures in the Good Pub Guide.

The BBPA said that the unusable beer and loss of sales due to the COVID-19 lockdown has had a devastating impact and without further additional support for the beer industry many brewers and pubs would struggle to survive.

Emma McClarkin, chief executive of the BBPA, said: “The need to destroy so much beer really shows how much our brewing and pub sectors have been affected by this crisis. The Government needs to give our sector much more support.”

Meanwhile, Titanic Brewery has secured £1m in funding through the Government-backed Coronavirus Business Interruption Loan Scheme, securing the jobs of its 200 workers in the process.