Licensed venues face increases of up to 578% while large scale distribution sees minimal change
The Scottish Hospitality Group is sounding the alarms for Scotland’s licensed hospitality sector after new non-domestic rates revaluations revealed a stark and damaging imbalance in how different sectors are treated.
When large scale online distribution and supermarket logistics sites are seeing only modest increases, and in some cases reductions, bars, restaurants and hotels and late night venues across Scotland are being hit with eye watering hikes that many businesses simply cannot absorb.
Examples from the latest revaluation show:
- Online Distribution Warehouse, Dunfermline: +12.96%
- Online Distribution Warehouse, Motherwell: +8.25%
- Supermarket Distribution Centre, Livingston: -0.21%
- Supermarket Distribution Centre Bathgate: No Change
By contrast, licensed hospitality is facing dramatic and punitive increases:
- Ayrshire Hotel: £460,000 → £731,000 (+58.9%)
- Barrhead Hotel: £83,000 → £268,000 (+222.9%)
- Dumfries Hotel: £100,000 → £174,500 (+74.5%)
- Glasgow Restaurant: £58,000 → £140,000 (+191.7%)
- Glasgow Bar: £56,000 → £380,000 (+578.6%)
- Edinburgh Bar: £79,306 → £154,000 (+94.2%)
- Edinburgh Bar: £13,894 → £52,300 (+276.4%)
These increases come at a time when hospitality businesses are already under intense pressure from rising wage costs due to eNICs, energy costs, food inflation and higher taxes. Business rates are a fixed cost, and for many venues, this is the final straw.
The figures expose a non-domestic rates system that fails to account for risk, margins or economic reality.
Licensed hospitality is:
- Labour intensive
- Margin sensitive
- Community based
- Highly exposed to fixed costs
Yet it continues to be treated as a cash cow, while large scale logistics and distribution operations benefit from scale, automation and resilience, and can simply add a few pence to the cost of goods with little public reaction.
As Stephen Montgomery, Director of the Scottish Hospitality Group, said:
“These revaluations are not just unfair; they are economically reckless and are simply a tax on entrepreneurship. You cannot claim to support town centres and local jobs while loading unsustainable fixed costs onto the very businesses that keep our high streets alive.”
“A bar or restaurant cannot just ‘put 50p on a pint’ the way a supermarket can add
50p to a loaf of bread. The margins aren’t there, and the risks are far greater.”
Government Concern Must Now Turn into Action
The Scottish Government has already acknowledged serious concerns. The First Minister has stated:
“I am concerned by the detail that I am hearing about some of the decisions that have been arrived at… the Minister for Public Finance has already engaged in considering the implications.”
Meanwhile, Public Finance Minister Ivan McKee has said:
“The Scottish Government is listening to all interested parties… as we collect information, analyse the data and make decisions for the 2026–27 budget.”
The Scottish Government, in recognition of the outdated and unfair valuation methodology for non-domestic rates has commissioned an independent review into the valuation methodology.
Montgomery added “The Scottish Hospitality Group strongly support this review, having championed it, and we have set out clear, practical asks in our manifesto, but now we need Ministers to engage with us before the Budget, not after venues have already closed.”
A Defining Moment for the Scottish Budget
On the Scottish Budget, Montgomery added: The upcoming Scottish Budget represents a chance for the Scottish Government to take a different path to that seen by the UK Government in England, by steering licensed hospitality down a better road, by supporting all licensed hospitality including those with an RV above £51k, or, it can repeat the mistakes of the last two UK budgets, who sidelined the sector, and inflicted in many cases irreversible and severe financial and job loss damage on them.
“Our message is very clear, that without urgent intervention and longer term support, Scotland risks accelerating the decline of its bars, restaurants and hotels, and hollowing out the very communities it claims to protect”.
