Monday, May 27, 2013

Hands in the Till

All the pubco's have had their hands in their publicans' tills for the last twenty years - pubco's have been abusing the beer tie by hiking up rents massively while selling beer to their tied lessees at double, or more, open market price - and they've got away with it so easily for so long they based their entire business model on taking everything from their publicans and leaving nothing for them to invest in their own businesses - which is why pubs are run down and rotting into the ground all over the UK.

The inevitable consequence of these short sighted pubco profiteering practices always was the golden geese would die and that's what's happening to pubs right now. It's a national crisis which without government intervention will continue to become a cultural catastrophe.

Non brewing pub companies (pubco's) have had a dramatic impact on the pub sector in the last 25 years since they were invented in response to the Beer Orders, legislation that forced the massive brewers to break up their estates.

Being unrestricted by legislation, Pubco's came to own the majority of pubs in the UK. They rent their pubs out to thousands of lessees who are obliged to buy their supplies - from the pubco's - through the beer tie.  These prices are unregulated and are as much as double open market prices... which has led to the retail price of beer at the pump being made artificially high.

Basically Pubco's have had their hands in their publican's tills and taken most of their profits through sky high rents and wholesale supply charges. All other factors affecting pubs - from economic climate to recession, smoking ban, limited range of products available through the tie, increasing business rates, material overheads, perceived better value offered by supermarkets - all these impact on pubs whose low profitability due to their freeholders taking too much of their income. has meant they have limited options to invest in their businesses and evolve their 'customer offer'.  Customers have moved their spending to other better value outlets and thousands of pubs have been left behind and forced into business failure... They are now being sold off by their pubco's 'suitable for alternative use' to raise cash to throw at their massive debt mountains.

Enterprise Inns, for example, has £2.7 billion debt this year AFTER paying off £54million they raised by flogging off 150 pubs this year. They are looking to sell another 400 pub this year just to service debt. Meanwhile they assert their remaining 5,000 plus tenants are 'happy with their business relationship' with the freeholder.

Tied Pubs are unfairly disadvantaged in the marketplace and this imbalance of power must come to an end if what is a crisis in the British pub sector is not to become a catastrophe.

Fair Deal For Your Local campaign is helping change this -
Twitter @FairDeal4Locals

Everyone - anyone interested in pubs and good beer and the value of good community - is invited by government to add their views on pubco legislation via a consultation which ends 13 June; it can be accessed easily through the 

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