The number of pub and bar companies going out of business has fallen by 7% over the past year amid increased popularity of craft beers and food, a survey shows.

Ortus Secured Finance, which lends money to the hospitality sector, said the number decreased from 521 to 480, partly due to firms replacing bank funding with alternative finance.

The latest figures are part of a longer decline in the number of pubs and bars closing over the last three years, dropping by 16% since 2013/14 where insolvencies in the sector hit 574.

Managing director Jon Salisbury said: "Small and big pub companies alike are becoming increasingly aware of alternative finance and the value continued investment can have for their business.

"There is a real desire amongst a large demographic to spend on super-premium drinks like 'brewery fresh' or 'unfiltered' artisan lager. A £5 pint no longer raises eyebrows."


Image: Pub sector insolvencies have been on the decline

Government figures show a new brewery opens every two days in the UK. With overall beer sales relatively flat, the craft beer producers are eating into the mega-breweries' market share.

Research by UK brewer Miller Brand found that £1 of every £4 spent on beer in London was on a super-premium beer.

Mr Salisbury added: "The effects of the Licensing Act, added to the growing trend of gastropubs has meant that more people are staying at pubs and bars longer, and spending money on food as well as drinks."

Michel Hartman, Co-founder of CAMRA (Campaign for Real Ale) said: "It's a jolly good bit of news that the decline in pubs is being arrested and I really hope that is going to happen over the next few years because without pubs you can't drink good quality draught beer.''