Saturday, May 14, 2011

RE: MPs to re-open pubco inquiry

They'd rather keep Rob May in the office because he's prone to Foot In Mouth disease; eh?

The inquiry could go either way - for or against the lessees.

The tie's been ripping off the industry for decades. It's long overdue for it to be removed to enable a free market to flourish where, once the middlemen leaches quietly sucking all the profit are removed, there will be investment in sustaining the fabric again and a flourishing industry will emerge; far too long overdue.

It might be worth pointing out the blindingly obvious to the committee: that the industry is imploding and provide the publicly reported evidence; give them quotes from press releases of all the major pubcos which essentially admit that none of the tied estates are sustainable.

One way or another, as far as I can see, every pubco that's followed the big six's model of strip mining pubs for every last bean until they are shut forever, and calling it churn in a market that is overpubbed, are either dismantling or abandoning their estates altogether because the leased model is not working because it's been bled dry.

The pubcos will argue that it's all because of the usual deceits; duty, supermarket competition, red tape, smoking ban, demographic change, stupid lessees, stupid customers changing their habits and nothing to do with charging tenants double for beer and whacky rentals but their arguments cannot get away from the fact that they have become allergic to the business model they created while they made massive profits - and to the fact that they've got shed loads of debt lying around from the gravy train years which they haven't a hope in hell of ever repaying; Rather a bit like the situation they forced their tenants into which was the bedrock they mined - making profit out of nothing - in creating the basis of the tied pubco model... ironies abound in this pack of cards that's full of jokers.

Just look at the illustration heading this article then consider what's happened to each of the pubcos in turn. You have the answer - the tied estates of each one have substantially failed one way or another and in each case it's that their individual pubs are not generating returns. Compare that with the performance of all the estates that are not tied, no matter how they are operated - and they are NOT failing - while they are trading in the exactly the same market conditions. What is the difference? Smoking ban? Supermarket competition? Demographic change? Duty? Red tape? Beer prices? Rent? The Tie?

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