Friday, May 08, 2009

David Elliot. I take it that the "WE" you refer to in the heading for your article is not just Greene King, for which you are responsible, but the whole pubco edifice. So "YOU" deserve to be attacked from all sides because the collective business model that has evolved out of the tatters of the Beer Orders has provided a foundation for the pou industry which is commercially completely unsustainable.

You correctly point to BBPA's TOTAL failure to represent this industry effectively but conveniently ignore the culpability of pubcos for this situation. Pubcos, are the BBPA's pay masters and have had a responsibility to brief them well, set their long term objectives, and make sure they deliver on those points. This clearly has not happened for decades because pubcos' long term interests have not been in alignment with those of the industry as a whole.

You are bound to take issue with ALMR - because ALMR has taken issue with aspects of your company's - and all other pubcos' business model - which have not worked, are not working and cannot work because pubco policies extract the vast majority of profit from thousands of individual small businesses, leaving many of them in no position to adequately maintain let alone develop business premises because there is no cash left to put back in. Pubcos are in total denial of this pernicious situation which utterly disincentivises individual licensees, forces them into downward spirals of financial, physical and mental exhaustion, personal despair and general life fatigue, incapable of seeing the wood for the trees and, effectively, creates a situation where the licensee becomes part of the cause of their own businesses' downfall while the pubco stands by with their cash syphon full on waiting for the inevitable churn... BUT the churn has been grinding to a stop, bouncing the unsustainbable financial crisis from the individual small busineesses back to the pubcos for the first time.

Surely the BEC Inquiry must have considered Greene King's submission carefully. And surely, if the compelling evidence of why the tie is helpful provided by your company had been substantially different to the evidence offered by the gigapubcos, your company's attendance would have been requested.

"What other industry provides a £500k+ property to operate for a very low in-going coupled with, in Greene King’s case, first class support?" This statement is meaningless if it stands on its own. Provide detail of the average ingoing costs to new licensees; how long it takes for individual businesses to repay that investment, the average annual income of the individual 'entrepreneur', rather than of a couple, running their small pub business, what sort of average return they can expect out of their investment, work and endeavour when they coem to sell on their business; and how many of these businesses fail each year in your estate... the churn rate.

MPS, far from 'jumping on a bandwagon without sufficient knowledge', are simply taking notice of the dire situation reported by many of their tied licensee constituents which they then see is repeated across the country with alarming frequency. Tenants of all pubcos report being subject to similar conditions as each other, it clearly is not smoke without fire and much of it comes down to the conditions of the tie. This situation meets with a country wide all party political response. This is not 'jumping on a bandwagon' while being ill informed. It's politicians responding to genuine need expressed by their constituents.

If your company's support is so first class across the estate how come you "see many businesses that are dirty, with poorly trained staff and no food offer whatsoever"? Where does your company fit into this description of how many of its businesses are run? Does your company take any responsibility for this state of affairs? Does your company ask itself WHY so many of your businesses are as you describe before asserting that the reason for this is: "again nothing to do with the tie"?

Your final comment: "If that is not the support you are getting from your pubco then I suggest you give us a call!" I'm sure will result in Greene King's switchboard being jammed by licensees of all other pubcos clamouring to get on your induction programme sharpish and join in on your company's unblemished record of success.

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