Thursday, July 03, 2008

Well well well! ‘SIMON SAYS’ and everyone jumps? I don’t think so. By omitting any mention of Fair Pint what Simon is really saying is that Fair Pint’s got a FAIR POINT. Come on bloggers WE all knew this kind of easy sound bite rhetoric was going to be coming from PubCos so there's no need to react like it's an earth shaking statement. This is the start of PubCo wittering before the autumn Select Committee sessions. It is an essentially EMPTY statement that denies PubCos having ANY responsibility for their own estate or for keeping it in order in times of trouble. Simon is trying to lay fault for his businesses’ income, cash flow and indebtedness at the hands of forces beyond his company’s control. Such as lessees who just can’t cut the ebb and flow of economic change being floored by Government legislation, the smoking ban, duty increases, the credit crunch, bad weather, leaves on the line; ‘the perfect storm’. RUBBISH. What’s going on in this trade has NOTHING to do with PUBCOS? JUST read through Simon’s statement again with your smoke and mirror filter on: What ‘Simon says REALLY is an admission that there ARE real economic problems here – and this makes some aspects of Enterprise’s money generating business not work the way it’s supposed to... Suddenly the value of their bricks and mortar is plummeting, they aren’t earning cash the way they always do, there’s nothing left to squeeze out of the juicy tenants who were ruby grapefruit but now are lemons. PubCos have over extended their borrowing against future tied income. Now THAT is seriously under threat and they are having difficulty figuring out how to get out of their own home made Credit Crunch. Shareholders beware! Enterprise are between a Black Rock and a hard place.What Simon’s really saying is that Enterprise wants the tax payer to take care of their problem through business rate relief and other means. Their lessees’ financial difficulties are nothing to do with Enterprise. Why, Enterprise is SUCH a concerned caring Company that it is even offering one in nine lessees "some form of rent relief or drinks discount". That sounds grand Mr Townsend but what, really, do you mean by this? What does RELIEF amount to? ‘Relief’ on hand from a PubCo sounds good and generous but BE SPECIFIC Simon. Tell us what this corporate generosity REALLY is. Could it be that your concessions are a fixed period of lower rent in return for a deed of variation from partial to full tie? Could it be the lessees have to go cash with order now and pay the discounted arrears once they've got themselves out of the deep financial hole they’re in right now? Could it be that the ‘drinks discount’ allows lessees to buy ONE beer cheaply so they can offer ONE beer at a price that can compete with managed and free of tie pubs locally? Think about it. It’s becoming quite clear that PubCo World wants democratically elected Politicians – ergo taxpayers - to bail their business model out. The wheels are coming off the PubCo gravy train. Of course this has NOTHING to do with the PubCos and everything to do with nasty naughty Government. Why SHOULD tax payers carry ANY of this burden? PubCos are perfectly happy to take all the praise and profit when times are good so why on earth shouldn't their 'Robust Business Model' take the strain when the economic chips are down? It's THEIR estate that's in trouble. Why should the Government be cajoled into thinking it's the taxpayers’ responsibility? ‘SIMON SAID’ “When pressed by Lib Dem MP Greg Mulholland on the number of Enterprise lessees that had surrendered or forfeited their leases, he replied he did not know but that it was "not a significant number".
If I were an investor in a company where the C.O.O. ‘SIMON SAYS’ I don’t know how many of the pubs in my estate are closing. I’d be concerned. Wouldn’t you? "The tied tenant should be no worse off than the free of tie". If this REALLY were the case SIMON wouldn't have to be SAYING anything and there would be no need for a Community Pubs Inquiry. The facts are that tied lease rents are, through the dominance of the PubCos in this market, now at least as steep as Free Of Tie rents. Following through from this reality is the FACT that beer prices to the tied trade are at least double that of FOT - without negotiation with the supplier - and tied lessees are earning NOTHING. The PubCos have juiced their fruit basket and there's only pulp left.

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