Pub Companies : Tue Jun 18, 2013 4:42 pm  

Following Jerry Chicken's post about PubCo's (in the Obama thread), I thought a new thread would be appropriate rather than reply in that thread.

How ironic it has all turned out to be.
Back in Thatcher's reign, it was decided that brewers' tied pubs should be allowed to sell other beers and not be tied to only selling that brewery's beer.

Cue the brewers selling-off their pubs to pubco's (or in the case of Whitbread, converting themselves from a brewer to be chains of restaurants etc and a property company) ... so that now we have ended up with almost the same situation, just that it's not the brewers calling the shots but the pubco's, some of whom are far more keen to squeeze their tenants than the brewers ever were.

Re: Pub Companies : Tue Jun 18, 2013 4:47 pm  

After years of steadfast and dogged campaigning, CAMRA may finally be getting somewhere on this. http://www.fairdealforyourlocal.com/

After years of steadfast and dogged campaigning, CAMRA may finally be getting somewhere on this. http://www.fairdealforyourlocal.com/

Re: Pub Companies : Tue Jun 18, 2013 5:22 pm  

For anyone new to the topic have a read of this blog post first, its genuine as my MP is currently chairing (or at least shouting the loudest) a Commons pressure group to have the PubCo public house tie system changed or completely eradicated as a severe restraint of trade and unfair contract term. http://pubaliciouspubs.wordpress.com/2013/06/14/my-name-is-angelique-this-is-my-story/ If you check his Twitter feed (which is how he corresponds all day) @GregMulholland1 you'll see that he is regularly contacted with many similar stories from pub licencees who are struggling or bankrupted by the actions of their lease holders - THIS is the main reason why the pubs in your locality are closing. Its not all a one way street though, one of the biggest PubCo's Punch Taverns are struggling to refinance massive debts , if you are in any doubt as to how they all arrived at this position have a read of that previous link as the Punch Tavern model is the one used by several others, its being originally set up by one of the City's whizzkids who still thinks its a viable way to run businesses, he appears to be in a minority of one though http://www.cityam.com/article/punch-taverns-lenders-meet-discuss-alternative-debt-plan The official HM Government response in 2011 was this http://www.official-documents.gov.uk/document/cm82/8222/8222.pdf which was then later discredited by the Commons pressure group when it was discovered that a PubCo pressure group had basically written the script for the Dept for Business Innovation & Skills (I linked to it some months ago but will try and find it again). Its a big smelly pile of poo and if Punch go under the refinancing required to buy each individual trading public house back will bankrupt hundreds if not thousands more, a simple loosening of the beer tie would solve most of the landlords problems but that is as likely a solution as free flights to the moon on Sir Richard Bransons new space ship

For anyone new to the topic have a read of this blog post first, its genuine as my MP is currently chairing (or at least shouting the loudest) a Commons pressure group to have the PubCo public house tie system changed or completely eradicated as a severe restraint of trade and unfair contract term. http://pubaliciouspubs.wordpress.com/2013/06/14/my-name-is-angelique-this-is-my-story/ If you check his Twitter feed (which is how he corresponds all day) @GregMulholland1 you'll see that he is regularly contacted with many similar stories from pub licencees who are struggling or bankrupted by the actions of their lease holders - THIS is the main reason why the pubs in your locality are closing. Its not all a one way street though, one of the biggest PubCo's Punch Taverns are struggling to refinance massive debts , if you are in any doubt as to how they all arrived at this position have a read of that previous link as the Punch Tavern model is the one used by several others, its being originally set up by one of the City's whizzkids who still thinks its a viable way to run businesses, he appears to be in a minority of one though http://www.cityam.com/article/punch-taverns-lenders-meet-discuss-alternative-debt-plan The official HM Government response in 2011 was this http://www.official-documents.gov.uk/document/cm82/8222/8222.pdf which was then later discredited by the Commons pressure group when it was discovered that a PubCo pressure group had basically written the script for the Dept for Business Innovation & Skills (I linked to it some months ago but will try and find it again). Its a big smelly pile of poo and if Punch go under the refinancing required to buy each individual trading public house back will bankrupt hundreds if not thousands more, a simple loosening of the beer tie would solve most of the landlords problems but that is as likely a solution as free flights to the moon on Sir Richard Bransons new space ship

Re: Pub Companies : Wed Jun 19, 2013 9:18 am  

JerryChicken wrote:

... a simple loosening of the beer tie would solve most of the landlords problems but that is as likely a solution as free flights to the moon on Sir Richard Bransons new space ship

This is the bit that puzzles me ... the whole idea in the first place was to loosen the beer tie ... and we have ended up with just transferring it from the brewers to the Pubco's.

When in London, I often gravitate towards Sam Smith's pubs, where the beer is usually good, the buildings themselves are usually interesting or historic and the prices are way lower than most London establishments (I'm thinking of The Princess Louise on Holborn, The Chandos nr Trafalgar Square, The Yorkshire Grey on Langham St and, if it's not too busy, The Cock on Gt Portland St. ... plus many others)
They seem to sell only Sam Smith's branded products, so I'm guessing that they are all managed houses rather than tenanted?

Re: Pub Companies : Thu Jun 20, 2013 8:48 pm  

Early Day Motion tabled in May http://www.parliament.uk/edm/2013-14/57

Early Day Motion tabled in May http://www.parliament.uk/edm/2013-14/57

Re: Pub Companies : Tue Oct 15, 2013 7:09 am  

Just an update on this, if you are on Twitter then have a look at #greatBritishpubcoscam and the response to Greg Mulhollands House of Commons speech on the PubCo model, I haven't seen or heard any transcripts of it yet but by all accounts it was a good old rant and contained lots of the evidence of asset stripping that he's been collecting over a few years now.

That hashtag also contains this graph which if accurate contains all the explanation you need ...

Re: Pub Companies : Tue Oct 15, 2013 7:23 am  

Further to the graph above the campaigning blogsite "PUBlicity" has this post with the Enterprise Inns financials : http://pubaliciouspubs.wordpress.com/2013/09/24/pubco-disposal-figures-expose-the-reality-of-the-pubco-business-model/#more-225 "In 2012 Enterprise Inns had a net cash flow from operating their Pubs business of £296 million but in the same year their debt and interest payments totalled £430 million. To make up the £134 million shortfall Enterprise Inns have had to resort to selling off pubs[5]. This has happened four years in a row and 2013 could see 5 years." There are also some remarkable figures in this post and although it is a blog and a personal opinion of the author, they do tend to back up their numbers with sources and links to sources and a lot of the numbers come from the PubCo's own declared accounts http://pubaliciouspubs.wordpress.com/2013/10/08/setting-the-record-straight-debunking-the-myths-about-pubco-reform/ "In six years an 11g keg of Fosters from a major pub company has gone up from £107 (ex VAT) to £151, an increase of £44. In the free trade it cost £77 six years ago, it costs £87 today, an increase of £10. The same duty rates apply, the same duty increases apply, the same increased manufactur- ing costs apply, the same increased overheads apply, yet the price increase to a tied tenant is nearly four and a half times that of a free of tie publican, in six years, for the same product"

Further to the graph above the campaigning blogsite "PUBlicity" has this post with the Enterprise Inns financials : http://pubaliciouspubs.wordpress.com/2013/09/24/pubco-disposal-figures-expose-the-reality-of-the-pubco-business-model/#more-225 "In 2012 Enterprise Inns had a net cash flow from operating their Pubs business of £296 million but in the same year their debt and interest payments totalled £430 million. To make up the £134 million shortfall Enterprise Inns have had to resort to selling off pubs[5]. This has happened four years in a row and 2013 could see 5 years." There are also some remarkable figures in this post and although it is a blog and a personal opinion of the author, they do tend to back up their numbers with sources and links to sources and a lot of the numbers come from the PubCo's own declared accounts http://pubaliciouspubs.wordpress.com/2013/10/08/setting-the-record-straight-debunking-the-myths-about-pubco-reform/ "In six years an 11g keg of Fosters from a major pub company has gone up from £107 (ex VAT) to £151, an increase of £44. In the free trade it cost £77 six years ago, it costs £87 today, an increase of £10. The same duty rates apply, the same duty increases apply, the same increased manufactur- ing costs apply, the same increased overheads apply, yet the price increase to a tied tenant is nearly four and a half times that of a free of tie publican, in six years, for the same product"

Re: Pub Companies : Tue Oct 15, 2013 7:27 am  

JerryChicken wrote:

Just an update on this....

So, Enterprise are depending on selling their pubs to stay afloat?
Taking that to its ultimate conclusion, they'd have no pubs and no business.

I'm still confused though ... if Enterprise sell a pub, it's still a pub and not necessarily a closed one.

Re: Pub Companies : Tue Oct 15, 2013 7:30 am  

Greg Mulholland speech is currently on Parliament TV http://www.parliamentlive.tv/Main/Player.aspx?meetingId=13837, not sure how long it will stay on there as it seems to be a replay of yesterdays affairs (so presumably will last 24 hours - the coverage starts at 14.00hrs yesterday, Mulholland stands at 22.06. Its a damn good speech and I've asked if he will publish the whole of it on his own web site

Greg Mulholland speech is currently on Parliament TV http://www.parliamentlive.tv/Main/Player.aspx?meetingId=13837, not sure how long it will stay on there as it seems to be a replay of yesterdays affairs (so presumably will last 24 hours - the coverage starts at 14.00hrs yesterday, Mulholland stands at 22.06. Its a damn good speech and I've asked if he will publish the whole of it on his own web site

Re: Pub Companies : Tue Oct 15, 2013 7:42 am  

El Barbudo wrote:

So, Enterprise are depending on selling their pubs to stay afloat?
Taking that to its ultimate conclusion, they'd have no pubs and no business.

I'm still confused though ... if Enterprise sell a pub, it's still a pub and not necessarily a closed one.

Not when a few months later its a Tesco Express (The Queens, Burley Rd) and many other examples.