Hospitality venues could be facing another year of limited capacity this Christmas, industry leaders have warned.
Throughout the festive season, pubs and restaurants could be forced to reduce the number of customers they serve as the industry is expected to be hit with supply disruption.
Customers are also likely to experience price hikes as food and drink shortages continues across the country.
Speaking to the Commons Environment, Food and Rural Affairs Committee, industry bosses told MPs to expect a reduction in the choice of goods available during this year's festive season, reports Wales Online.
Representatives from the retail, logistics and hospitality sectors have called on the Government to take action in order to address shortages in supply and labour.
Bosses warned that recruitment challenges are likely to stifle the recovery from the economic impact of the pandemic.
Kate Nicholls, chief executive of trade association UK Hospitality, said there was a 10% vacancy rate across the sector which amounts to a shortage of about 200,000 workers in venues including bars, restaurants and nightclubs.
She added venues were experiencing a “double whammy” of problems in recruitment and the supply chain.
Ms Nicholls said: “It is the cruellest of ironies that at the point at which you are reopening, [with] a desperate need to rebuild cash reserves, shattered balance sheets and trade your way out of this… your ability to do that is constrained by the fact you don’t have access to sufficient labour and revenues are suppressed by about 15-20% in the sector, simply because of labour shortages in our businesses and the supply chain.”
She said a quarter of Hospitality UK’s members have had to reduce opening hours, close venues and refuse bookings as a result.
Asked what impact this would have over the busy festive period, Ms Nicholls said the industry’s supply chains were subject to “continual shocks” and subsequent price increases that will affect consumers.
She added: “I don’t think we can give the hospitality that we would like to because, obviously, we would prefer to be operating at full capacity and not turning away business, which we are having to at the moment.
“Christmas is our golden quarter as 40% of hospitality profits are earned between Halloween and New Year’s Eve, so it is vital for the health and success of the recovery of the sector that we are able to deliver Christmas as fully as we can.”
Asked if labour shortages have been caused predominantly by the absence of a coherent post-Brexit domestic workforce and skills strategy, and the ineffectiveness of government employment initiatives, she said: “Yes, I think that that gives a good overview of the main reasons that we have got labour shortages in our sector.
Ms Nicholls added: “There is significant cost price inflation coming through the supply chain and hitting and passing through to consumer prices probably after Christmas in all likelihood, but some of our businesses are anticipating three price increases going through before we get to April.”
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