AN ENERGY price shock has hit the Scottish hospitality sector with businesses faced with huge increases - when companies are willing to quote for a switch of supplier.

It comes as Scotland's leading bar and restaurant operators have warned that the increased Covid restrictions will put investment plans and jobs at risk.

They estimate a two week lockdown will cost their businesses more than £10 and are calling for government help to ensure the sector remains poised for the post-Covid recovery.

Pubs, hotels and restaurarants, already hit by the coronavirus lockdown are also suffering after being labelled "high risk" en masse, with huge price hikes from some suppliers and blanket refusals to quote for a deal switch from others.

UK Hospitality has called on the government and Ofgem to investigate energy firms hitting hospitality businesses with higher tariffs than other sectors and "extortionate deposits".

Long established restaurateur Paul Sloan, who has outlets all over Scotland, was quoted a 27.3% increase for a year's renewal with SSE for his Cuan Mor Restaurant in Oban, while EDF, EOn and Haven Power refused to give him a quote.

Cuan Mor spends around £24,000 annually on electricity and the best deal offered by a supplier equates to a 12.6 percent increase.

He said: "It appears to be a blanket situation where the entire utility industry has decided to penalise our sectors.

"We are now considered to be a high risk sector, so the prices are being put up and you are going to get crucified."

He added: "I think the Scottish Government should be getting involved in this. Cuan Mor turns over £1.8m a year and has been trading for fifteen years, yet three of the major electricity companies wouldn't even quote."

Neil Morrison, owner of McGochans restaurant and bar in Tobermory, on Mull was refused quotes from four electricity companies, while his current supplier quoted a 2.9% increase.

McGochans, a long established business, which was rebuilt after being destroyed by fire was due to reopen just as lockdown happened in March, then had to wait months before it could actually open its doors.

Mr Morrison said: "What the electricity companies are doing is a double whammy, you are getting hit twice, because of Covid-19 and the sort of trade you are in.

"It's not a level playing field, you are being hammered because they don't trust someone else in the same industry."

"We are being penalised at a time when we need to watch what we are paying out, because the income is not there the same and electricity is one of the major expenses."

Paul Waterson, spokesman for the Scottish Licensed Trade Association, said energy companies need to re-evaluate how they are treating the businesses.

"At a time when surveys indicated 12,500 staff jobs in hospitality were in danger and a third of places were under threat of closure, the reaction of electricity companies is not helping," he said.

"When you look at what other suppliers are doing to help us, electricity rises are not going to do anybody any good whatsoever, they need to reconsider their position.

"I don't think people understand how difficult it is at the moment. It's a very worrying time and the last thing we need is electricity companies putting up their charges."

UKHospitality chief executive Kate Nicholls has written to energy minister Kwasi Kwarteng to demand an investigation into behaviour she describes as "beyond belief" as operators struggle to stay afloat.

She says members reported "truly shocking" practices, included being quoted "significantly higher prices for being in the hospitality sector than others. In some cases people were asked to give substantial deposits – in one instance a £60,000 deposit for a single hotel.

The letter added: "In further examples we have been told of energy companies penalising hospitality businesses for unused energy during the lockdown period. This lack of empathy with businesses that have been savaged by the coronavirus crisis verges on immoral but there seems no recourse that can be taken."

Ofgem, the energy watchdog said they were aware that the pandemic had resulted in some energy suppliers being financially impacted and as a result suppliers may be unilaterally taking steps to change their policies towards renewals and new customers.

But the spokesman added: "Ofgem recently unveiled measures to help millions of microbusinesses get a fairer energy deal.

"The package of support would help tackle unscrupulous brokers, strengthen dispute resolution, and deliver smoother switching.

"Fairer energy bills are more important than ever as micro businesses recover from the impact of Covid-19. Suppliers should treat customers fairly to support them in managing their energy needs"

An SSE Business Energy spokesman said: "Customers’ renewal prices are subject to a number of factors which include fluctuations in the costs of wholesale energy as well as non-commodity costs such as transport, agency fees, metering and other government levies.

"Consideration is also given to risk associated to individual industry types "SSE Business Energy has a longstanding commitment to working with all customers and offering competitive rates which are reflective of the necessary considerations that must be applied to all renewals."

In July, Ofgem announced its commitment to taking action against the overcharging of small businesses through inflated, and often undisclosed commissions and hidden fees.

According to Ofgem, businesses, charities and public bodies spend £25 billion per annum on energy . A significant percentage is often made up of the undisclosed fees that are stinging UK businesses year after year.

A detailed report submitted by Business Energy Claims estimated 90% of microbusinesses using an energy broker are likely to have fallen prey to one or more forms of mis-selling as a result of the lack of official regulation to protect them.