Supplementary memorandum from Enterprise
Inns (regarding individual cases)
I am now in a position to address the various
submissions that were made to the BEC inquiry by a number of current
and former Enterprise licensees.
I have summarised my assessments of each case
below, but have also attached the more detailed responses that
have been made to each case by members of my staff who are most
familiar with the circumstances. In the case of the Eagle in Battersea,
I have also included a letter from James Dickson, Chief Executive
of Brulines plc, who has addressed some of the more technical
issues raised regarding the use of flowmetering equipment.
In relation to the matters raised by Mr Law,
my summary assessment is as follows:
1. There has clearly been some antagonism between
Mr Law and the landlord (previously Whitbread and since 2002 ETI)
ever since he was unsuccessful in his application to take on the
2. There also appears to be a history of issues
relating to dispense data, initially between Mr Law and his then
employer (the lessees), and latterly between Mr Law (as joint
lessee) and ETI. The grounds for concern (on the part of ETI)
have always been valid, albeit the explanation eventually provided
(by Mr Law and Mr Clarke) has led to resolution of the issues.
3. Mr Law makes a number of spurious and unfounded
assertions in his submission which are not supported by fact or
4. Mr Law appears to be on something of a campaign
in relation to the use of beer monitoring equipment, raising a
number of questions over accuracy and process. None of these issues
stand scrutiny, and I enclose a detailed response from the Chief
Executive of Brulines which addresses each issue in turn.
5. Mr Law and Mr Clarke (who has provided evidence
separately to the Inquiry), having paid £125,000 for the
remaining term of the lease for the Eagle, have now made several
attempts to change the basis of the terms of the agreement they
initially purchased. Sadly, this has not provided a sound base
on which a productive and constructive trading relationship between
ETI, Mr Law and Mr Clarke could be based.
In relation to the submission by Mr D, my summary
assessment is as follows:
1. Mr D has sought to completely re-invent the
circumstances which led to his bankruptcy, indeed with the benefit
of hindsight justification, now seeks to blame Enterprise entirely
for the financial situation he allowed himself to get into, owing
substantial sums to HMR&C.
2. Mr D failed to resolve a four year dispute
which led to HMR&C petitioning for his bankruptcy. At no time
during this period did Mr D raise concerns or complaints in relation
to the profitability of the three sites he occupied under Enterprise
3. Mr D's submission to the inquiry is littered
with fabrications and innuendo, none of which is supported by
the documentary evidence we have.
4. Following Mr D's departure, at his own request,
from St F's, all matters were handled by administrators acting
on behalf of Mr D's creditors, of which Enterprise were one. Enterprise
did not recover all of the monies owed by Mr D.
5. Mr D makes a scurrilous and entirely false
insinuation in relation to the recent fire at the St F's. I can
confirm that all statutory compliance certificates were in place
at the time of the aforementioned fire, and it is the preliminary
conclusion of the Fire Brigade investigation that the incident
was caused as a result of a burning chip-pan, inadvertently left
unattended by staff at the premises. I am pleased to report that
the individual who was hurt in this incident is now recovering.
6. Finally, I can confirm that the total number
of licensee changes in all three pubs since Mr D left occupancy
is six, and in only one case was that as a result of a failed
substantive agreement. All other occupancies were on a temporary
basis while we sought new substantive tenants.
In relation to the submission by Mr C, my summary
assessment is as follows:
1. We were unable to agree the terms of the rent
review, as the level of information disclosure by Mr C was poor,
and despite several expert valuations being produced at Enterprise's
cost. Mr C eventually appointed David Morgan (founder of the Fair
Pint campaign) to act on his behalf, and we were able to agree
the level of rent payable based on a detailed proposal made by
2. Until that point in time, no rent offer had
been made by Mr C, for which reason Enterprise only agreed to
pay Mr C's costs for the period after the offer was made and accepted.
3. Mr C has continued his policy of non-disclosure
by failing to provide any factual information to support his claim
for financial assistance, nor allow the installation of flowmetering
equipment with which to validate the trade at the pub. The company
has therefore been unable to agree to provide financial support.
Mr C has responded by detailing his version of events to local
news and TV media.
4. Mr C is a vocal critic of Enterprise, and
of pub companies in general, and we have been unable to form the
basis of a sensible working relationship with him.
5. The area around Skewen has suffered long term
economic decline, and a number of pubs have closed in recent years,
which should provide Mr C with the opportunity to grow his business.
Enterprise owns a number of pubs in Skewen and the surrounding
area, some of which are extremely well run by long-established
retailers, and others are being very effectively operated by temporary
tenants and managers to restore damaged businesses.
In relation to the submission made by Mr M,
my assessment is as follows:
1. Notwithstanding the fact that there clear
differences between Mr M's description of his period of occupation
of the Blaenogwr and the company's documentary evidence, this
does appear to be a very unfortunate case of a business failure
despite the best attempts of Mr M and the company.
In relation to the submission by Mr K of the
Crown and the Town Hall Tavern, my summary assessment is very
1. Mr K occupies two Enterprise pubs on entirely
different agreementsone attracts discounts and the other
2. Mr K and his business partners entered into
a brand new, non-discounted lease at the Town Hall Tavern, with
full knowledge and understanding of the prices attached to the
lease, and their impact on the rent payable for the pub. Enterprise
leases are entirely clear regarding the purchasing obligations
entered into by lessees.
3. Mr K has wilfully breached the terms of his
lease by purchasing drinks supplies from an unauthorised source
(albeit his other ETI leased pub) at terms that are incorrect
in relation to the level of rent paid at the Town Hall Tavern.
4. On 3 February 2009, damages equivalent to
the level of margin lost by the company were agreed and accepted
by Mr K, and he has been allowed to remedy the breach and remain
at the pub.
In relation to the submission made by Ms W,
this case has taken up an immense amount of management time over
the course of the last few years, and remains completely unresolved.
I would summarise as follows:
1. There has been not one single occasion on
which Ms W's allegations and complaints have been supported by
the facts and the documentary evidence available, yet this has
not stopped Mrs W from embarking upon a completely unjustifiable
campaign of actions against the company, including a court action
for alleged harassment.
2. Every occasion on which the company has been
required to defend its actions have resulted in judgements in
the company's favour. This specifically includes the action for
alleged harassment which was thrown out by a judge on the grounds
that Ms W's claims were "totally unfounded and without any
3. Ms W was ordered to pay all the costs of the
actions she has taken, and has consistently failed to do so.
4. Ms W's trading account with the company has
continued in arrears, despite the company agreeing a new rent
level for the business with Ms W and her adviser David Morgan.
5. At the date of writing, Ms W has still not
complied with her statutory obligations to provide electrical
safety certificates for... , nor complete the works under which
such safety certificates would be granted.
6. In summary, I have to concur with the observations
and inferences of our Divisional Director who has overseen the
relationship between the company and Ms W over a number of years,
that Ms W has comprehensively failed to make a success of her
business at... not least as a result of the amount of time, energy
and money she has expended on a completely unjustifiable campaign
against the company.
7. Should the committee require it, we have extensive
records of documentation and correspondence relating to this case
which support the company's position throughout.
I hope that the observations above, when combined
with the detailed responses provided by my staff, demonstrate
that in the cases represented by these submissions, Enterprise
staff have always sought to act in a professional, transparent
and mutually acceptable way during the period of our business
relationships with licensees. Unfortunately, there are, and will
be, occasions on which we have to take robust action in order
to protect the interests of the company, but I am satisfied that
in these cases, my staff have taken the appropriate course of
action for the right reasons.
20 March 2009