Further supplementary evidence from Punch
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
In addition, we will shortly be announcing the
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
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
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 circumstancessuch
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 colleaguesit 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