Wednesday, July 16, 2008

News Article Comments : Gov: Contact OFT with pubco concerns

The government DOES need the humble publican to illuminate the issue. The government entirely MISSES what this market ACTUALLY IS. The analysis of competition in THIS MARKET is based on looking at competition between PubCos - and clearly this aspect of the market IS competitive. PubCos all strive to out do each other - to out perform to maximise shareholder value... What is missed is the market within the market which is the thousands of individual small businesses that make up the PubCos and which provide the PubCos with all their profits. This part of the market is essentially hidden from observers because it's thousands of individuals fire-fighting to keep their shirts on their backs. They don't have time to tell the government what is happening. They probably DON'T EVEN KNOW what the over all reality is - they only have their own experience to go by. What they certainly do know is that THEY aren't making a living out of it and for that they blame all the obvious external factors and not the one they know they can't ever change - their freeholder... People might grumble about their freeholder and the tie being unfair - but that's never going to change - so why waste energy even thinking about it changing? They can vote in a different colour though so they can aim their despair at the government without ever telling the government anything. On the other hand the PubCos have the BBPA telling MPs over teas and coffees and genteel drinks in parliamentary bars and cafes that their publicans are suffering because the nasty wasty government isn't listening to the fluffy PubCos who are really worried about why their tenants are struggling and they should really be giving everyone rate relief, tax break, beer subsidy, minimum pricing legislation and anything else you can think of to help the good stalwart uncomplaining publicans across the land (i.e. the PubCos' collective bottom line. You see many MPs have a VERY clear view of the situation with the pub industry - a very clear view set out by the PubCos where social change and economic stress imposed by government are the sole drivers of failure in pubs across Britain. PubCos would have it that their robust business model is efficient and works very well but that times have changed and pubs are going out of business because our culture has moved on. That's why PubCos were backing the promotion of 24 hour licensing and the development of 'cafe culture' in pubs - effectively promoting the notion that there has been a great 'need for change' in the way individual licensees do their business if they want to stay viable - it falls neatly into the argument that diversification in pubs is key to survival in this thrusting new world and when pubs close for good the blame is put squarely on the shoulders of operators who are unable to change with the market. And a market that is rejecting pubs - NOTHING to do with the way the PubCo business model is structured to remove all profit from the outlet and stash it in shareholders' coffers. A shame but a necessary adjustment. Little Dinosaurs going extinct.

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