Pub Companies - Business and Enterprise Committee Contents

Memorandum submitted anonymously

  I believe my recent experiences running pubs for one of the major pubcos is relevent to your inquiry into pubcos.


  I have run four pubs over the last 24 years with the most recent being:

    The Swan at Nibley which was operated by Courage, Inntrepreneur, Unqiue and finally Enterprise Inns and I ran for 21 years. My tenancy finished in May 2008.

    The Frog & Bulrush which was operated by Enterprise Inns and I ran for five years. I sold my lease in February 2008.

  My main contention is the unfair position the tied tenant/leaseholder is in when trying to challenge the might of the pubcos and the often scandalous treatment of us. Prior to the introduction of the Beer Orders tenants belonged to tenant streams and LVA's who championed our causes. Nowadays these are virtually non existent tenants being left to the mercy of pubcos trusting them to be fair. Unfortunately the only reason for pubcos existence is to pay dividends to their shareholders, treating tenants/leaseholders fairly is not a priority.

  Pubcos will argue that there is a legal discourse to settle disputes. This is not true. To be able to challenge using the legal system costs thousands of punds, something most publicans cannot afford. There is little profit from running pubs nowadays. Usually failing tenants leave quietly having lost their money. New tenants have been easy to find oftent raising the ingoing or price of a lease by the sale of their former home or from redundancy payments.

  There seems to be a minimum figure of £30,000 which pubcos need to yield from a site irrespective of its profitability. They will argue that that should be the minimum wage for the publican operator and according to their calculations of 50% profit all should be well. The yardstick of 50% is not realistic in today's market. The number of pubs currently closed as unviable were not on a "no rent level" but they were on a "no profit level". In today's trading conditions the publican is expected to comply with masses of legislation: Access for the disabled, minimum wages, maternity benefits, increased holiday entitlements, increased health and safety requirements, more onerous fire regulations and the smoking ban. This all needs funding.

  I purchased the lease on the Frog & Bulrush in 2003 which had a low rent of £15,000. I began the process of upgrading an old and shabby building. I was fully tied for beer and cider and had no guest ale provision. I paid full list price with no discounts. At my first rent review the proposed rent was £31,000 more than a 100% increase. Nothing had changed in the local environment or economy to justify such a rise. I braved things out and eventually we went to arbitration. The arbitrator ruled a little above the caulderbank offer from Enterprise Inns. Not able to make a realistic profit and being required to pay my legal fees together with Enterprise's I sold the lease. I had no other option. I feel the arbitrator is not on the side of the struggling tenant but rather on the side of him who feeds him. They too have to live with the power these giant companies from whom they need to earn a living. I was an experienced publican who ran a busy pub which served food, was clean and tidy, had well trained staff but was not able to make sufficient profit.

  My other pub The Swan at Nibley which had also come under the Enterprise umbrella was due to have its non assignable lease renewed—formerly referred to as a tenancy. Having recent experiences of Enterprise Inns and having a period of ill health I decided not to renew my lease and gave nine months notice. As a sitting tenant I knew this was required and needed to be registered with the court. I was assured that there would be no problem reletting the pub on a long lease. A new tenant was found but decided not to proceed due to the transfer of undertakings obligation. Enterprise then decided to run the pub using a management company in the interim whilst they found another new tenant. On the day of changeover 19 May 2008 their representative met with the staff to tell them the pub would close for a few days whilst the management company found a manager. They were not to be paid but were laid off and as such could claim benefits. I am not sure of the legalities of what they have done but I do know my ex-staff are taking me to an industrial tribunal to claim redundancy payments and unfair dismissal payments which will cost me £10,000 to defend and which I cannot reclaim as costs. Needless to say they have not been re-employed and the pub lies empty. The original new tenant will shortly be taking a lease on the Swan minus the staff; the whole exercise was to save themselves or Enterprise paying the transfer of undertakings and leave me footing the bill, approximately £35,000. This will use up my life savings. What a way for us all to be treated. My long serving staff should have been given proper notice and proper payment if they were not required by the ingoing tenant instead they lost their jobs overnight and I stand to loose the little money I have left which will leave me facing retirement penniless.

  The Government cannot have envisaged the outcome of the changes they made to achieve more choice for customers and to break the monopoly of big breweries but in the process they have created these monster companies which are ruining people's lives and livelihoods. The old brewery tied tenant system was not without its problems and change was needed but what we have in its place is far worse. I speak from experience having worked with both.

15 September 2008

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2009
Prepared 13 May 2009