Pub Companies - Business and Enterprise Committee Contents

Further supplementary evidence from Punch Taverns

  I sense that you, like I, felt a little frustrated with the course of events in the recent Hearings into the relationship between pubcos and their tenants. Sadly, the process got sidetracked this week on minor issues, whereas we all have grave concerns about the impact that regulation and increased beer duty is likely to have on the great British pub and smaller traditional brewers in these unprecedented economic times.

  It would be wrong to take a view from the evidence sessions that the industry is deeply divided. It is in the absolute interests of Punch Taverns to do whatever is reasonably possible in these challenging times to protect and maintain a sustainable future for our pubs. Sadly, it is likely to be the case that the economic circumstances will see more pubs closing that has been the case in the recent past. However, our aim is to find a common ground with our leased and tenanted customers to ensure that the vast majority survive.

  In the session on Tuesday, we confirmed the following assistance which we will begin to implement immediately:

    —  We will increase the cooling-off period for new leases from 90 to 180 days.

    —  We will execute a Deed in relation to any pub that approaches us with the request to have their historic upward only rent review clause permanently removed from their lease agreement.

  In addition, we will shortly be announcing the following initiative:

    —  In these challenging times and in addition to the significant levels of support that we are already providing our customers, we would be prepared to allow our customers to purchase their pub from us provided that it is in the best interests of both our customer and ourselves. Whilst finance is not easily available at present, it is hoped that some customers would be avle to take advantage of the current historically low interest rates.

  We also made the following other commitments at the session on Tuesday:

    —  We will send you a technical note explaining how the Brulines systems differentiates water from beer going through the pipes.

    —  We will look into any of the 12 complaints from Punch licensees that you are able to let us have.


  Despite the perceived battle lines, the industry is a very amicable place and there is a huge consensus that the common enemy is regulation, over zealous social responsibility legislation, the tax accelerator on beer and the outrageous pricing strategies of the supermarkets.

  The chairman of the ALMR, Tim Sykes, and the chairman of the FLVA, Dennis Griffiths, are both personal friends of mine and having spoken to them since the evidence sessions we are each strongly of the view that further progress can be made by a few simple actions:

    —  Excellent work is being done by the BII to create a low cost option for pub tenants and their landlords to resolve disputes over rent reviews and this needs to be seen through to a satisfactory conclusion. This initiative is curretnly in the pilot stage and will be launched in the early part of next year.

    —  The industry can do a much better job of highlighting to their lessees the large number of organisations that can help in providing advice in such circumstances—such as the BII helpline, the FLVA, the SLV, the ALMR and the BBPA. It should be the responsibility of all companies that lease pubs to individuals to make their respective lessees aware of the existence of these organisations. Moreover, these organisations should not fear seeking some of their funding from the pub companies, provided it is done on an arms-length basis and with no influence associated with the donation.

    —  It is my strong view that clear, plain English agreements, plain English accredited codes of conduct and appropriate dispute resolution processes will further improve the requirements of fairness and transparency.

  I also believe that these efforts would positively differentiate the pub sector from other retail industries that rely on the commercial lease market with none of the safeguards that we provide or are proposing.

  Through these contacts, and provided you feel this is in line with your findings, I would be happy to progress the discussions in an effort to come up with some concrete actions that the Committee can adopt.

  Finally, I would welcome the opportunity for any members of the Committee to see the pub trade first hand with either myself or one of my operational colleagues—it is worth nothing that we have pubs in every single Committee members' constituency. It is my view that by getting you out in trade you will meet large numbers of incredibly dedicated people, both employees of Punch Taverns and our leased and tenanted customers, who are all working flat-out in these challenging times to protect and evolve the pub industry for all our futures.

11 December 2008

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