British restaurant owner Tom Kerridge said one of his businesses faces a “ludicrous” 600% increase on its energy bills.
The Michelin-starred chef said he was quoted £420,000 to supply energy for a year at one of his smaller locations, up from £60,000. He warned the surging prices will cause other venues to “shut it all down and reopen in spring.”
Kerridge blamed the fact that there is “no price cap on business energy,” which means energy suppliers can raise prices to match the cost of electricity, which is currently soaring thanks to the effects of Russia’s invasion of Ukraine.
The U.K.’s energy market regulator Ofgem sets a cap on the price of energy provided to consumers, but there’s no equivalent cap for businesses.
Kerridge said he’ll have to find ways to reduce his consumption, but he believes that for other businesses the level of increases “is just nonviable.”
“Those margins are most definitely are not there in businesses to be able to pay electricity bills that are going up five, six, seven hundred percent,” he said in an interview with the BBC. “No wonder so many businesses are closing.”
The cost of U.K day-ahead electricity is currently £259.09 MWh as of September 2, according to the N2EX auction platform, compared to a five-year average of £82.08. Prices hit an all-time high of £571.09 per MWh on August 25, which may be reflected in Kerridge’s quote.
Kate Nicholls, CEO of U.K. Hospitality which represents the industry, said these price increases “pose a very real, existential threat to many [businesses] especially smaller businesses. Yet we’re still not seeing intervention in the form of a commercial price cap, which appears nonsensical when there’s one in place for consumers.”
On Wednesday, six pubs and brewing groups including Greene King, Carlsberg Marton’s, and Admiral Taverns called for the government to introduce a cap on the price of energy for businesses, along with a financial support package.
Brewdog CEO James Watt said his business will have to close six bars, and warned that half of the U.K.’s drinks establishments could close due to rising energy costs.
U.K. Chancellor Nadhim Zahawi said the government is preparing proposals for the incoming prime minister that could include assistance for businesses struggling with rising energy costs.
Implementing any of the changes will have to wait until next week when the winner of the PM leadership race takes over from Boris Johnson, after he pledged not to make any major fiscal decisions while the leadership race takes place.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
