The owners of two village pubs which sit half a mile apart have been left confused by the new tier system that means only one of them is allowed to serve customers indoors.
The Crown Inn, in Kent, has been placed in the highest third tier while Junction, in East Sussex, is in the second tier.
The new restrictions will begin on Wednesday when the national lockdown ends in England.
The pubs are located 0.4 miles apart in Groombridge which borders the two counties.
The Crown landlord Steve Harmes said only being able to serve takeaways would leave him unable to take advantage of the crucial Christmas period and he would not be able to make up the loss.
The “frustrated” owner told the BBC: "We were not in such a bad position before, but now, being put in this position, it's really hard for us to move forward."
Watch: How England's new three-tier COVID system will work
Junction landlord Tiffany Pearson-Gills, who opened her newly renovated pub on 5 November, is pleased she can serve customers but admitted the new rules were “perplexing” for villagers because both establishments were so close to each other.
She added: “It's great for us, but it doesn't make sense that the Crown up the road cannot [open].
“It's just so close, it's a really, really difficult one.”
Some of the highest rates of COVID-19 in the UK will see Kent plunged into Tier 3 amid concerns over rising hospital admissions.
Two Kent boroughs – Swale and Thanet – have the two highest rates of Covid-19 infection in England, according to data analysis from the PA news agency.
All counties bordering Kent have been placed into Tier 2, meaning their pubs and restaurants will reopen after lockdown.
East Sussex has an infection rate of 136, which is higher than two Kent boroughs which share a border with it - Ashford and Tunbridge Wells.
In total five Kent districts have a lower infection rate than the 250.5 in neighbouring Bexley, which as part of London falls under Tier 2.
Kent MPs fear residents will go to restaurants and pubs in nearby London and Sussex that are in looser coronavirus restrictions and are allowed to open with an 11pm curfew.
Sir Roger Gale - who represents COVID hotspot North Thanet which is one of the areas that has dragged the county into Tier 3 - believes residents will “skip over the boundary" into areas with softer restrictions to enjoy a pint or a meal.
He and other Kent Tories had favoured a district-by-district approach to enforcing the measure.
Boris Johnson said he understood the “frustration” people who had been placed in higher tiers despite not having a high infection rate in their area felt.
The added the new rules were meant to add “simplicity and clarity” and the government did not want to cause confusion by dividing up the country into “complicated sub-divisions”.
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