Time to call 'time' on the pubcos
by heartless giant Enterprise Inns
I had a routine medical check-up last week and was told my blood pressure was “brilliant”. That was before I read last week’s Morning Advertiser and the report of the eviction of two Enterprise hosts in Sheffield.
My blood pressure would have gone off the Richter Scale, not so much brilliant as boiling. The photo accompanying the report shows the licensees, David and Anne-Marie Ball, surrounded by supporters from the GMB trade union. Even though they have such vociferous backers, Mr and Mrs Ball looked like broken and dejected figures, their lives ruined.
It’s not an isolated case. I wrote last year about a pub close to my home, the Old Fox in Bricket Wood in Hertfordshire, where the tenants were evicted by Punch Taverns for rent arrears. There was no softening of hearts at Punch when the hosts pointed out that much of their business in a rural locality depended on customers enjoying the large garden in the summer -- and the summers of 2007 and 2008 had been a disaster, their trade ruined as a result.
In spite of these pleas, Punch won a court order and the two publicans lost not only their pub but their home as well. One of the most heart-breaking aspects of the current crisis in the pub trade is that licensees depend on their pubs not only for their incomes but also as the roofs over their heads.
Let’s look at the facts surrounding the Fleur de Lys in Totley, Sheffield. Enterprise said it was owed £8,000 in rent arrears and £12,000 in losses as a result of the licensees buying outside the tie.
In response, Mr and Mrs Ball claimed barrelage figures supplied by Enterprise when they took over the pub in August last year were exaggerated. They said the £7,500 deposit bond they paid when they moved into the Fleur de Lys covered the rent arrears. They contested the pub chain’s right to charge £12,000 in alleged losses for “buying out”.
And the Balls said the annual rent of £30,000 – an amount sufficient to make your eyes water – should have been closer to £16,000 based on an annual turnover of £160,000.
Here is further evidence of the urgent need to investigate the role of the national pub companies. They act like rogue elephants, tramping through the undergrowth and stamping on anything and anybody that stands in the way of making massive profits from their estates.
They are ruthless profiteers who don’t give a tuppenny damn for the people who run their pubs and the communities they are supposed to support.
Pubs such as the Fleur de Lys should not be designated as tied houses. The pubcos are not brewers who need the direct connection between production line and pub to make their business viable. Pubco outlets are supposed to be free trade – that was why they were not covered by the Beer Orders of the 1990s that forced national brewers to sell guest beers in their pubs.
By what impudent authority does Enterprise Inns tell David and Anne-Marie Ball they should not have bought outside the tie when they should not be covered by a tie in the first place?
CAMRA’s “super complaint” to the Office of Fair Trading, calling for a probe of the pubcos, their rents and their prices needs to be addressed as a matter of urgency. The report last month by parliament’s Business and Enterprise Committee (BEC) into the working of the pubcos was sufficiently alarming to need action by the OFT.
The BEC found that tenants or lessees in pubco outlets pay 50 pence a pint more for beer from their landlords than if they bought outside the tie. With a crippling 19% increase in beer duty from the government in the past 16 months, is it any wonder that many desperate hosts do buy outside of the tie – a tie that should not, in my opinion, exist.
Perhaps the most scandalous activity of the pubcos concerns the use of restricted covenants. This is such a breach of any concept of the free market that I am stunned that this is permitted in a country wedded to the enterprise culture.
Time and time again, the pubcos close pubs on the grounds they are not viable but stop anyone else buying the outlets by imposing covenants that stipulate the buildings cannot be reopened as licensed premises. This explains why the country and rural areas in particular are dotted with former pubs that have been turned into private houses as a result of the pubcos refusing to allow free traders to buy them.
There are many examples of outlets closed by pubcos on the grounds of lack of viability that have been turned into vibrant free houses, run by people dedicated to their communities and offering a wide choice of beers from mainly local suppliers.
The pubcos, on the other hand, are driven solely by the need to maximise profits. They prefer to buy the bulk of their beers and lagers from global brewers who can afford the deep discounts demanded. Licensees are saddled with punitive rents and the threat of eviction.
It’s time to call time on the pubcos. I urge the OFT to investigate without delay.
*In the interests of fairness – and, as you know, fairness drips from every bone and cuticle of my body – I asked Enterprise for their comments on the Fleur de Lys but they did not respond.