Friday, December 04, 2009

Pubco inquiry line-up revealed

Nothing is a foregone conclusion? The behaviour of pubcos can usually be predicted with precision. The behaviour of isolated tenants in financial trouble can often be the same. Pubcos use this to their advantage.

With BISC BEC nothing can be a foregone conclusion - obviously, pubcos have got off the hook many times before and, as you point out Chris, many influential people agree with the 'better the Devil you know' angle. This is lazy thinking and changes nothing. The argument that legislation is bad free market is good has this industry in the pickle it's in - no one has had the balls to stand up to pubcos because they are so powerful and people imagine Hell will break loose if they fail as a result of the power they abuse through the tie being taken away from them. Reality is much less exciting than hype and Hell will not be watching if pubcos go down if Fairness wins over. There will be much needed market adjustment at the top rather than thousands of casualties at the bottom. As it is casualties of the pubco hegemony are falling everywhere and there's a lot more to come in the next few months, both sole operators and groups.

Change is needed, and radical change at that, if we are to have a healthy mature pub industry that is capable of responding to change and staying viable in future.

There has been oh so much skulduggery on the dark side since BEC published its report earlier this year that by now BISC ought to encouraged to take stern action confident in the knowledge that without legislation pubcos simply will not alter their habits significantly enough to have a meaningful impact on the viability of thousands of individual small businesses moving forward.

Legislation is needed to curb the excesses of a few and stimulate a massive shot in the arm that is needed by the many who have been hamstrung by the twisting of the tie. Sacrifice a few in the salvation of thousands.
While Alastair Darby may well be an engaging and charming, intelligent person, the company he represents is not a person and behaves very unlike anyone would expect someone like Mr Darby to. Historically all manner of unsavoury and totally unacceptable business practices have developed in the name of shareholder value and the need for perennial performance improvement Vis. for example Guinness Peat's recent ascerbic criticism of Adnams' financial performance. Where there are no external checks and balances to prevent the lowest behaviour becoming the norm the bullies always get into the playground and wreak havoc.

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