Sunday, July 07, 2013

Is This The End of the Great British Pub?

Nice article Tom (IN ESQUIRE) Parker Bowles but the closure rate clocks up at 26 a week, not 18, and you don't mention the beer tie - which keeps most of those delicious beers made by those 1000 exciting new brewers that Pete Brown mentions out of most our pubs.

Pubco's are more than significant when it comes to pub closures.  They are at the heart of the failure of the pub sector. They are running a massive scam which is nothing less than a comprehensive asset stripping of Britain's heritage and tradition.  It's a cultural crime on a scale unprecedented since the Reformation of the Monasteries and as this is so widely known about now it's a little surprising it didn't come up in your piece even as being an elephant in the room -

Pubco's between them own more than half the pubs in Britain.   Pubco's charge excessive rents and double open market rate for the beers they oblige their tenants to buy through the pubco supply chain.   Pubco's HAVE to charge usurious prices because they are struggling to pay even the interest on the mountains of debt (£billions) they racked up buying overpriced pubs to gain market share in the nineties.

When their tenants go out of business serially, called 'pub churn' in the pub business, pubco's blame anything and everything, other than the fact their rents are too high and supply prices extortionate, to explain why their pubs are failing in droves...  their point of last resort is that they cannot find good enough tenants to run their pubs for them.

The Gunmaker's is Punch - you might ask Jeff if he's happy with his supply prices.   Ask for a copy of his price list.  Compare it to the prices you can get from any independent wholesaler anywhere in the UK - without asking for any discount for volume.  You will be shocked.  It's clear evidence why pubs are closing - they cannot make enough profit to reinvest in the business when they're paying out so much for their supplies - it's their pubco who takes all that - and the pubco's don't spend anything on their pubs.  That's the tenants' duty - which is why 'churn' is so popular with the pubco's.  New tenants invest, business picks up, pubco bleeds tenants dry, tenants go out of business; new tenant invests; repeat until building is so run down it's spent - then flog it off.

That's why pubs are closing.  Insatiable financial demands of private equity driven pubco's take the majority of profits in the pub sector to pay £billions of debts they raised to buy overpriced pubs to gain market share in the 90's;  their debts are so HUGE they struggle to meet even the interest payments.  One of the biggest pubco's debt is so big that INTEREST payments alone amount to £31,000 per pub per year. Every pub in their estate of thousands is paying out £600 after tax every week just so the pubco can pay its debt interest.  That's a scam.

The pubco's have their fingers firmly in all their lessees' tills and earn more from the pubs than their publicans do.   Although many people cannot admit they are being stitched up ask a tied publican off the record if they are happy with their business relationship with their pubco and they will say 'no'.   Government knows this and this is why the department for Business Innovation and Skills headed up by Vince Cable is looking at regulation of pubco's - and why they had consultation and why ten organisations, including Federation of Small Business and CAMRA recently got together to set up Fair Deal For Your Local:

While it's fair to concur that all is not lost for the future of the British pub, there's no doubt the pub sector is in crisis.  This is affecting communities everywhere.  For the first time in history people all over Britain are facing a future starkly without a local 'secular church', as you put it so nicely, to meet their neighbours in as pubco's flog them off 'suitable for alternative use, subject to planning'.

Pubco's don't care about pubs or beer or people or communities or shareholders or even bondholders.  They care solely about meeting their debt obligations so they don't 'officially' prove, by default, they are insolvent.  The hundreds of Tesco Locals, bookies, fast food take-aways and naff residential conversions blighting the landscape all over the country are testament to the Great British Pubco Scam that most people, even if they are unaware of it,  see happening right under their nose.

It needs to stop.

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