Wednesday, November 07, 2012

Exclusive: Licensee reveals all about Enterprise Inns and PICA-Service case

Article on Publicans' Morning Advertiser

I can't read all of the comments but from skimming ONE from 'We're not all like that' what I can say is this:

You ARE ALL like that. Some individuals in the companies may not be like that - some of you, as your presence here asserts - don't want to be like that. But your companies ARE like that. And THAT is why the pub sector is crippled. THAT is why thousands of pubs have gone and are going down the pan. THAT is why the market is the way it is. THAT is why JDW have such a dominant niche in the good value end of the market - there's no one who can compete with them.

The beer tie has taken all the profit from the shop floor of the pub industry and syphoned it off into Directors, Shareholders and Bondholders' trousers. The pub sector been structurally and catastrophically deprived of investment by Private Equity interests, for decades.

There's not enough room for the indebted pub companies to move even if they really wanted to. They need lots of investment to recoup their accumulating losses. And no one's going to invest that kind of money. And most of them ARE the indebted companies. IN order to survive they HAVE to change the business model. But that costs investment. Do nothing and the company collapses as income from dilapidated estates and their dispirited and penniless tied leaseholders dries up. Change the business model and the business collapses because not enough is going to come back in quickly enough to repay the new investment that's needed. Don't change the model instead but fiddle around the edges and the company collapses - just over a longer time. It is going to stay like that until, one way or another,  they collapse. There are a number of ways this inevitable course can take - rather like the meanderings of a wide sluggish river that's laden with silt, or sewage more like in this context.

But it's going to happen.

The counter side to all this doom is the other side of the pub sector - the side that HAS been invested in over the last 30 years while the tied pubcos interfered and fiddled with misrepresentation, over blown accountancy and valuation jiggery pokery. The side that brings us carvery concepts, burger barns and family feast fiestas all over the UK - the homogenised, anodyne, sanitised, characterless, creatively sterile, cheap and nasty branded carbon copy look alikes. Give the pub industry to the City and what we've got is what you get.

The pub sector needs a radical commercial intervention that revolves around people and planet before profit.

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