Memorandum submitted anonymously
I am writing to support the further investigation
into the pubco's following the voluntary codes set down by the
Committee in 2004.
I have read the 2004 Report and agree with all
the evidence that was supplied at the time. There has been no
change since the last report either in the evidence or in how
Punch have behaved.
My husband and I took on a Punch Leasehold pub
in 2005 not having had anything to do with the pub trade (my husband
is a senior project manager and I am an accountant). We have regretted
it ever since. We just can't believe that we are totally helpless
in dealing with them. We have no rights and no-one to support
We have worked for three years, got the turnover
up £100k by hard work and as yet have never been able to
pay ourselves anything. We have both had to go back to our original
professions and leave the staff to run the pub.
The pub makes £60k before rent and the
pubco takes £86k rent leaving us to fund the £26k shortfall.
So not only do we make no money at all but have to pay for the
We have a rent review in October and according
to the Punch Charter, we would be contacted 12 months prior to
start discussions. They had no intention of ever contacting us.
In the meantime I have contacted an independent rent assessor
who has been dealing with the review. The code of practise states
that the rent will be based on 50/50 of the divisible balance.
Not according to Punch. They concoct a profit and loss account,
inflating the turnover and grossly underestimating the costs.
In our case, their P & L states that we will make £172k
before rent. If we try to speak to anyone our request is ignored
and also any correspondence from our independent assessor who
incidentally found the rent should be £46k before further
allowances due to the drop in trade over the last 12 months following
the smoking ban and current economic climate. With adjustments
the rent should be around £26k not the £86k that they
They produce propaganda on a huge scale telling
the world that they have a good model and that the beer tie is
fair but this is just to bolster up their falling share prices
and to keep the real story out of the press. We also have to endure
bullying tactics and accusations of buying in outside the tie,
totally not true. In the 2004 report Giles Thorley, chief executive,
stated that regular meetings are held so as Punch "customers"
can get together to discuss problems and have access to a senior
manager. No such meetings exist as I was told by the BRM when
I asked to attend.
Punch's main tactic is to constantly make out
that you are doing a bad job and to keep you isolated from anyone
else. I consider Punch's business to be nothing more than legalised
extortion. There is no such thing as fair maintainable trade or
rent and there will never be a single person who will be your
Removal of the beer tie
This is unfair competition. Debra Kemp of Punch
was quoted in The Publican magazine as saying that it doesn't
matter if the beer price is inflated as the landlord receives
it back in the 50/50 divisible balance calculation. As can be
seen from my paragraph above this is clearly not the case.
Removal of the annual RPI increase
My rent at a starting rate of £86K will
very shortly be over £100k with the addition of RPI. That
will be over 25% of my turnover and the general rule of thumb
is that a business will be insolvent at 20%.
Independent Rent Reviews
In my opinion I think a levy should be imposed
on all pubcos to fund a totally independent body that will look
at the true rent position. This calculation can never be left
to the pubco.
Code of Practice
Giving pubcos a code of practice is like giving
The Kray Twins a code of practice. All the above the points need
to be put into the lease document and given a legal standing.
This is the only document that the pubco will quote from.
In conclusion, the pubcos have made fools out
of the 2004 Select Committee. They have lied to the Members and
will probably do the same again. They should have no problem with
the above recommendations as after all they are in their code
Please don't let them get away with this again.