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Sobering credit scores brew high energy bills for pubs

Posted: 1st December 2016



Lower credit ratings for pubs could mean higher electricity and gas bills this Christmas as energy suppliers keep the trade on their naughty lists for being bad payers.

Just like loan firms, energy companies perform credit checks on customers. How well you score influences how the industry prices your gas and electricity contracts.

Unfortunately, pubs are in a business category that has a bad credit rating because it has a reputation for defaulting on energy contracts. For pubs, it means bigger bills and a big headache for publicans just at a time when the trade is suffering. But there is help at hand.

Brokering a deal

Many pubs are turning to energy consultants to help them negotiate the contractual maze the industry finds itself in. With their extensive knowledge of the industry and connections with energy suppliers that pubs may not have heard of, brokers have become a welcome guide.

So, how does a poor credit risk affect the pub and leisure trade’s bills? Energy suppliers might ask a pub for a security deposit (often around 20% of annual spend) or an increased premium in the unit rate before giving them a contract. If, a pub can’t pay the deposit, the supplier could put them under a ‘deemed defaulter’ rate, which could add a hefty extra 70% on the premium. They could also, if the risk is deemed too high, decline a customer outright.

Chamber Energy Solutions can offer solutions tailored to an individual pub’s circumstances. If the pub is a limited company that’s been trading for 12 months, the broker may find a supplier willing to take a second view on it, for example. A broker may also be able to negotiate increased premiums over a longer term if a pub can’t pay a security deposit.

Let us help your pub secure a great energy deal without the hassle. Call us today on 0333 000 0132 or email

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Business Comment is the Edinburgh Chamber of Commerce’s bi-monthly magazine. It provides insight on Edinburgh’s vibrant business community, with features on the city’s key sectors, interviews with leading figures and news on new business developments in the capital.
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