Pub Companies - Business and Enterprise Committee Contents

Memorandum submitted by Rose and Crown

  Firstly, on the matter of rent review regardless of what has been said it is the clarity in which we receive it that leaves us in an extremely confused state.

  Secondly, a point we get regularly checked up on by Brulines is regarding cleaning. There is nothing to distinguish between water and beer when cleaning lines, only an assumption can be made because of the time you clean, nothing else.

  Furthermore, we decided to refurbish but were not allowed to carry out work ourselves. The reasons given hinged on legal aspects and costs which were far greater than our estimates and in due course added on to our rent 10%.

  With our beer tie we are in a no win situation as it's a full tie.

  The "Big Six Brewers" owned between then 55% of pubs and brewed 75% of beer consumed in the UK.

  Monopolies Commission tried to protect the consumer.

  Venture capitalists spotted the loophole.

  Today the "Big FOUR brewers" produce 76% of the beer, the biggest size pub operators (there are plenty more), own 44%, the majority of these being Private Equity outfits.

  503 pubs have closed in London alone over the last three years! (CAMRA, one year old statistics).

  One PubCo Chief has cited figures that only 14% of PubCo pubs have closed... Is that figure reflective of the pubs they sold to the developer, tenants that have gone bust and had to hand back the keys or worse still, hand over to someone else even more naive? Of course not. The PubCo will keep it open until they can find another victim.

  Why are the PubCos not worried about this?... because they are sitting on massive property portfolios with hugely appreciated and inflated values. The two biggest, Enterprise and Punch have a combined business value of over £1 billion, (yet boast they invest £10k in each).

  One cannot help but feel the "over renting" is deliberate, which any Analyst who you show the current PubCo business model to, will tell you. PubCo business models no longer stack up. It's not only the Tenants/Lessees and Trade bodies/Press that can highlight this "Peter Rackman" like behaviour, Enterprise on close inspection can show it themselves, with their near complete failure to comply with any of their promises to the Parliamentary Trade and Industry Select Committee. It was mainly lip service and smokescreen.

  Is it really just a coincidence that pub numbers have remained largely unscathed for hundreds of years until the inception of Private Equity-owned Pub Companies?

  This week we received our invoice for October's rent only to find it has again jumped up by 4.78% RPI from an already excessive £48,427,00 to the new rate of £50,741,81 not to mention rent review and exceeding beer charges.

  Or in the words of Ted Tuppen, "transparent and fair". Until now they have been proud to claim that they rarely go to arbitration and have never lost, implying that tenants are satisfied. The reality is that if we had lost we would have had to pay costs in the region of £40,000 to £50,000. How many small businesses let alone one man lessees can afford to take that risk?

29 September 2008

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