British produce annihilates profits, claims Clarkson

After showing us how gruelling the life of a UK farmer is, Jeremy Clarkson is finding out just how bitter running a pub can be. The Clarkson’s Farm presenter has opened up about the huge financial toll that his patriotic ‘all-British’ eatery, The Farmer’s Dog, has taken.

Clarkson had pledged to serve only food, wine, and beer “grown or reared by British farmers”, despite a warning from London restaurateur Jeremy King that it was “impossible”.

Writing in The Times yesterday, he revealed that his mounting COGS (Cost of Goods Sold) bill means he could now be losing £10 for every customer served.

Cash forecasting is a must-do for today’s cash-strapped businesses. Yet an unconventional decision by Clarkson to calculate his overheads using AI also appears not to have paid off.

British food ‘10x’ cost of imports

In an Instagram post last month, Clarkson proudly revealed the list of dishes that The Farmer’s Dog would be serving. The full list includes bar snacks such as sausage rolls, main meals like sausage and mash, and pub classics such as apple crumble for dessert.

However, some keen-eyed commenters were quick to point out that the initial post did not include a price list. “Looks great but the absence of prices makes me twitchy,” said one.

The Farmer’s Dog menu, complete with a suspicious lack of prices / Source: instagram.com/thefarmersdogpub

Clarkson’s bare-all column suggests the ex-Top Gear presenter has been left similarly ‘twitchy’ by the cost of his home-grown suppliers. He revealed that, while imported black pepper costs “about £10 a kilogram”, British-made black pepper costs “ten times more”.

“If I butcher one of my own pigs and turn it into sausages, each one of those sausages will arrive at the pub costing 74p. If I buy imported pig meat then the cost of a sausage is 18p”, he wrote, adding “[the] menu would bankrupt us in a matter of hours”.

Extreme rainfall this spring resulted in low yields on farms, causing the UK to face food price rises and producers to turn to imports.

Even this escape route has become less feasible. In April, the then-government unveiled a new, post-Brexit charge on small imports of products such as sausages and cheese.

Trade groups warned the move would increase business costs and food prices. It’s a prediction that appears to have come true, suggesting that even if Clarkson had imported his sausages, his menu wouldn’t have become much cheaper.

Lessons in AI

Alongside food costs, another expense that has crippled The Farmer’s Dog is energy rates. Hospitality firms can quickly guzzle up gas and electricity thanks to their equipment needs. Beyond just lightbulbs, pubs need to run fridges, grills and extractor fans.

As is common with a business premises, Clarkson was told his pub needed a three-phase system to accommodate the energy demands, at a cost of £350,000. On top of this, the business’ water supply quality is apparently so dire it needed a new pipe paying for.

Profit margins for pubs are already razor-thin; one reason why nearly 3,000 London bars and restaurants have closed post-COVID.

Facing these kinds of overheads, managers need accurate cash flow calculations. Unless, of course, you’re Jeremy Clarkson, who self-describes as “not a business-minded person.”

Recognising he would have to charge “£45 a hotdog” to make his money back, Clarkson says he “filled my heart with hope, asked an AI program to work out what the average price of lunch in a Cotswolds pub is, and just charged that.”

Pub struggles

Trusting an AI generator to guess your profit margins is the approach that a TV star earning £3m a year can risk. For a pub landlord, who earns an average salary of £33,477 a year, the consequences of a poorly-drawn out business plan are less easy to dismiss.

That said, the pub industry has become reliant on famous faces to platform its issues. Bake Off star Paul Hollywood was recently embroiled in a row after his wife decided to sell her family’s village pub. “It is a beautiful pub, but it is a business that is losing money”, he said.

But while Clarkson’s Fiasco might make entertaining TV, plummeting profits and sleepless nights are a reality for the nation’s remaining 40,000 pub owners.

Like Clarkson, many are reluctant to increase prices. Customers are tightening their wallets, and higher fees could be disastrous. Still, without a safety net to fall back on, hiked price lists are winning out in the debate about whether to raise, or freeze prices.

As long as sky-high supplier costs and energy rates continue to hit pub balance sheets, business owners are asking for empathy from customers. “Your lunch [is] costing us a lot more than it’s costing you. So please be kind”, says Clarkson.