Pub Companies - Business and Enterprise Committee Contents

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 us.

  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 privilege.

  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 are demanding.

  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 average landlord.


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 of practice.

  Please don't let them get away with this again.

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