Friday, October 05, 2018

The Pubs Code Adjudicator

The Pubs Code Adjudicator is called Paul Newby. He is without doubt a pub industry placeman. A selected candidate whose CV should have immediately excluded him from even a moment's consideration for the job. He should never have been appointed. A more inappropriate appointment for the post of tied pub sector policeman could not be conceived save for one of the major pubco CEO's stepping across to the post - but the massive pay drop precluded that ever being a possibility.

Newby on the other hand was senior director at Fleurets - the pubcos estate agent of choice with, conservatively, 20% of its annual revenue derived directly from doing pubco work - selling pubco leases and freeholds and marketing pubco training courses etc... Fleurets' income has been waning in recent years and Newby, along with other directors, has substantial directors' loan to the company which would be under threat of repayment were Fleurets to get into financial difficulties if its income from Pubco were to reduce which, if an independent Pubs Code Adjudicator were in post would be a serious likelihood as the balance of reward would shift from pubcos to their tenants... Newby could leave Fleurets - releasing the company from the burden of paying his salary - his well paid insulated job as PCA would ensure several years' at least before any impact of the Code would pass to the sector - during which time the pubcos could asset strip unhindered, change their business model to managed from tenanted and the profiteering from the attack on British social amenity would continue apace.

All that was predictable and all that is what has been happening. The evidence is in the published record of the past three years pub sector news...

For this to happen there has been collusion at all levels, from callous insouciance by government, arms length negligence by responsible Ministers whose only involvement in the pub sector is to attend beery jambories, hand shaking and back slapping senior pubco protagonists and lobbyists celebrating the homogenisation of the pub sector while criticising beer duty etc as being reasons for pub closures and executive level at CAMRA for denying there is a structural problem at pubco level and by supporting Newby's appointment.


Saturday, September 22, 2018

Beer Duty: why it matters!

Beer Duty is paid to HMRC by the brewer and forms part of the wholesale price of beer. 

When a Pubco applies their markup to the wholesale price the effect of Beer Duty is magnified.

For example if a pint of beer costs £1 wholesale and the Pubco applies a 54% markup then the cost of that pint to a tied tenant is 154.0p*.

If duty goes up by 1p/pint then the 101p wholesale price becomes 155.6p to the tenant.

Doesn’t seem like much of a difference does it? Except that the UK on-trade (pubs and bars) sold 3.64bn pints in 2017!

What do you think happens when duty goes down by a penny?

The wholesale price becomes 100p again. The pubco price becomes 154.6p also down a penny but now they make 54.6p for every pint they resell, rather than 53.9p.

This is the reason the British Beer and Pub Association (BBPA) - the Pubcos lobby group - wants duty lowered.

Beer Duty reductions make little difference to customers and brewers but are extremely profitable for the like of Punch Taverns, Ei Group, Marstons and Star Pubs and Bars (Heineken). Their clamour for this reduction can be seen in the current ‘Long Live the Local’ campaign in which the BBPA and its members claim to be supporting the very same pubs that their anti-competitive ‘Beer tie’ is wiping out at a rate of 12 a week.

* We know what a brewer charges for beer and we know what the Pubco resells it for. Pubcos seem to operate a Gross Profit of at least 35% which equates to a 53p markup on a pint. Punch Taverns accounts show their typical GP to be a whopping 43%, a markup of 75p on a beer costing £1!

What is ‘the Tie’?

THIS excellent piece by Graeme Wilson at the Golden Ball York

What is ‘the Tie’?

The tie has existed since the industrial revolution. As brewers’ output increased they needed to increase the number of outlets selling their ales.

The tie was born. A brewer would buy a property and fit it out to just sell their own ales. They would repair and maintain the pub. Then a leaseholder, in return for a modest rent, would live in and run the pub, buying all of their stock from the brewer.

In 1989 the government, concerned that only 4 brewers owned most of the UK’s pubs and hence most of the UK’s beer supply, introduced legislation now referred to as ‘The Beer Orders’. This stopped brewers from owning more than 2000 pubs and was intended to increase competition in the sector.

The result of the Beer Orders was that pub ownership moved from brewers to property companies (Pub Operating Companies or Pubcos). There was no limit on the number of pubs that they could own and they quickly expanded, buying up the tied estates of the brewers. These companies had no vested interest in what beer was sold and they were able to continue the tie. But instead of their tenants buying direct from the brewer they instead had to buy through their Pubco. The Pubcos added their own markup to the wholesale price, increasing the costs to tenants. Rents increased too as the Pubcos sought to generate revenue to finance their expansion.

Now a large part of our national pub stock in the ownership of corporations who have no interest in what beer is sold nor for how much, nor even whether their ‘assets’ remain pubs or become shops, offices, housing or are even demolished.

Pubcos have systematically starved their estates of investment shifting all of the costs of running the business onto their tenants, including repair, maintenance and even buildings insurance. As a result many pubs have become ‘unviable’, particularly community pubs similar to the Golden Ball.

This isn’t because of the Smoking Ban, nor because of Beer Duty. It’s not because people are drinking less. It’s another example of big business abusing our community assets for their own profit.

Friday, August 17, 2018

Silenced by magnitude and pressure of events...

A pub revival project and a terminal illness leading to a death have kept my full attention for over a year now...

Back soon I hope

Wednesday, November 22, 2017

The Elephant in the Room that is Our British Landscape Full of Dying Pubs


For anyone reading these threads who's not completely up to speed with the behaviour of the tied pubcos embroiled in the #GreatBritishPubcoScam it may well seem that exaggeration is used when describing the actions of these rogue trading companies.

It's impossible to exaggerate their delinquency. They are street gutter level muggers no more no less. They have no moral compass, they run rings around the law, such as Trading Standards; Weights and Measures; Landlord and Tenant Act let alone MRO legislation. They actively fuel a roaring fire in the black economy. They are despicable sociopathic corporations run by bullies and venal power graspers who have learned to look the other way in order to earn a living and drive a flash company car. They are motivated solely by greed, sustained by arrogance and wilful ignorance.

They are impossible to believe from a rational world viewpoint which is how they get away with their cultural crimes.

There. Most people reading this will dismiss it because it sounds like a huge exaggeration doesn't it?

THAT is the point.

It's not exaggeration, it is how they are. And YOU don't believe it. Do you?

Tuesday, November 07, 2017

Evicted Daventry publican closed pub because of rising cost of beer and rent ...

PUB & CARVERY couldn't be more accurate when describing the tied lease contract 

Alison Granfield stands outside The Peppermill

This woman is a victim of the #GreatBritishPubcoScam

The pubco's marketing material misrepresents what its tied lease business model offers - a form of enticement which can be interpreted after the fact as being done with intent to defraud - when you look at the evidence of 'tenant churn' in (all) the tied estates (around half the pubs in the UK) it's impossible not to deduce that a substantual proportion of all tied pubco's financial success is predicated upon the serial failure of individual pubs in their estates which in turn is predicated on the serial failure of multiple individual businesses being set up by starry eyed potential 'business partners' the pubcos have entrapped with their well worn white collar rogue trader business practices.

Many things are wrong in Britain that need correction but what will be looked back on as The Crime of the Century is the churn of the Corporate Cultural Criminal pubcos and their ripping apart community cohesion everywhere by deception and fraud committed on thousands of their tied tenants as they asset strip Britain's traditions, heritage and Sense of Place for the sake of short term private equity driven greed.

Monday, October 09, 2017

This Day Last Year I was doing research for the Brown Bear in Berwick-upon-Tweed

THIS day last year I was doing research for Berwick Brown Bear and met Jim Herbert down the Barrels Ale House. We got the Brown Bear open on 8 December.

It's been an interesting year. Brown Bear - set up as a not for profit social enterprise. Living Wage Foundation accredited. CAMRA LocAle awarded from January 2017. Serendipitously Roger Protz visited the pub the day after we opened during the final leg of research for his book Historic Coaching Inns of the Great North Road and wrote a sypathetic piece about this ex tied pub's revival as a modern free house.

And we've had some very good press since - see below. There is much still to do - a year is but a fleeting moment in the timeline of Great British Pub History -

We have convened an advisory board of local stakeholders which includes representatives of Berwick Slow Food Association and Berwick Film Festival and the Anglican Church. We are now getting support from Plunkett Foundation and applying to the More Than A Pub programme. Martin Booth, committee member at the George and Dragon Hudswell (CAMRA pub of the year 2016) is helping us with our Action Plan. Dave Hollings has helped with some excellent input in the background. Damon Horrill is sharing the exciting multi stakeholder cooperative business model he's developing around the Cornerstone Inns group. MANY other people have been supporting the pub in many ways - not just in being customers - and we have recently got a grant from Berwick Community Trust wind turbine core legacy fund to pay for a thorough environmental audit of the building and adjacent outhouses so we have accurate data for energy consumption and a detailed report on how to reduce the business's carbon footprint and a plan for making the property #FossilFuelFree in the relative near future.

Around all of this the marvellous Jim Herbert, historian and Quiz Master extraordinaire has been researching the pub's history... and has published a book called 'A Brief History of Opening Time ... the story of the Brown Bear'

The Brown Bear is definitely coming out of hibernation from a dormant period that threatened to end the pub's literally iconic life at the heart of Berwick-upon-Tweed. The next chapters of the Brown Bear's history are being made as we eat and drink

Monday, October 02, 2017

LIVING NORTH. LOCAL HEROES - the Berwick Brown Bear has come out of hibernation


Been busy since my last post in May 2016 - there has been a lot happening - got a pub underway...

article by Tom Nicholson August 2017
A good local pub is the heart, brain and soul of a community – and they’re vanishing across the country. However, co-operative, community-run pubs like the Brown Bear in Berwick are trying to turn the tide 

A good local pub,’ William Blake once said, ‘has much in common with a church, except that a pub is warmer, and there’s more conversation.’ You can see what he was getting at there: every truly good pub has that in-built sense of communality and shared experience, and of being the setting for celebrating and commiserating over all of the major plot points in your life. That bad break-up, your 18th birthday, that lazy Sunday afternoon that accidentally turned into the best session you ever had: in short, pubs are where much of the actual business of living – the fun bits, the human bits – happen.
But more and more pubs are dying every day in Britain. Between 2006 and 2016, we lost a fifth of all the pubs in this country – more than 20,000 – and last year more than 1,200 shut their doors for good. Many blame the influence of big pub companies (PubCos, as they’re known) for buying up pubs, charging wildly overinflated rents and underinvesting in the pubs themselves. Others blame beer duties and the rise of the coffee shop. Whatever it is, the upshot is that we’re losing a chunk of the nation’s soul every day.
Now, though, more and more groups of ordinary people are taking matters into their own hands, and returning pubs to their original purpose as the original social network. The Brown Bear in Berwick is a case in point. It was ‘really rundown,’ says Mark Dodds, the man who’s has taken the project on. The pub had been empty for two years when he arrived, and even before then it hadn’t been particularly handsome. Mark, who grew up in Newcastle and Morpeth, sees good pubs not just as the heart of the community but as the brain too, forging connections and sharing knowledge. ‘Without decent local pubs communities have nowhere to express themselves, exchange local information – they lose the glue to their community.’
After a quick ‘Changing Rooms-style’ refit and refurb, Mark and his team reopened the Brown Bear in December. Initially, the reaction was surprisingly hostile. While Mark points out The Curfew micropub and The Barrels as pubs doing things properly in Berwick, he thinks the PubCos’ influence runs deep.
‘It’s become pretty clear to me that the PubCos have had such a huge impact on this area for such a long time that all the pubs are so bad, and have been so bad for so long – bar the few small places I mentioned earlier – that people have grown up using pubs differently to the way I expect people to use pubs. They go to pubs to get slaughtered, they expect there to be very cheap lager, they’re not particularly interested in ale or anything of quality, just sessionable stuff. And they expect the pubs to be unattractive. It’s bizarre. It’s dystopian. In all honesty, it’s frightening.’
Mark knows he’s up against it. ’Berwick has lost, as a community, the memory of what it means to socialise in pubs for the reasons that we culturally understand pubs have value for,’ he says. The vision for the new Brown Bear is to be a multi-stakeholder co-operative that’s woven deeply into the fabric of the community, a sustainable social enterprise that can support satisfying long-term careers for staff. They’ve got support from Thistly Cross, Hadrian Border and Cross Borders breweries, 12 founder investors have put in about £60,000 so far, and local professionals are providing pro bono services. Fundamentally, it’s all about ‘doing what the people who use the pub want’.
They’ve got to feel ‘a sense of ownership of the pub’, Mark says, ‘that they’ve got an investment in something that is important, that does have cultural and traditional significance.’ From there, you get a virtuous circle of loyalty, emotional investment, and a renewal of a social hub that lasts.
By way of an example, Mark remembers a Sunday morning on the bar at a community pub he ran in Camberwell. His friend, a regular called Jes, came up to the bar looking grave. ‘I was in your beer garden last night, and I met my bloody next-door neighbour,’ he told Mark. Slightly taken aback, Mark asked him what he was on about. ‘We’ve lived next door to each other for seven years, and we’d never met before,’ Jes replied. ‘That’s what your pub has done for this community.’
That’s what Mark wants the Brown Bear to do too, so the front room of the flat above the bar has been turned into a free meeting space for community groups. Some of the first tenants were the organisers of the Riding of the Bounds, the traditional horse-ride which mark the boundaries of England and Scotland which goes back nearly 600 years, which Mark sees as pretty apt.
‘I think that, metaphorically, is what pubs are all about: history, richness of culture and tradition,’ he says. ‘Pubs are a great place to let that be expressed.’
Long-term, the plan is to keep doing up the Brown Bear, put on events to showcase the area’s food producers in the yard behind the pub, and start putting together a pseudo-chain of community pubs like the Brown Bear – a co-operative of co-operatives – which can support each other and their staff. But can it really work? After all, while the co-operative model is a noble and exciting idea, only 10 opened last year. That’s still a net loss of about 1,190.
‘It is idealistic,’ Mark admits. ‘It’s also feasible. It’s been done, around the country and around the world.’