Memorandum submitted by the Good Pub Guide
We have for some years been concerned about
the preponderant influence of the biggest pubcos. Indeed, we opened
the Introduction to the new edition of The Good Pub Guide
with these words: "The big pub companies or `pubcos' which
dominate Britain's pub scene have taken a battering on the stock
market in the past few months, seeing their share prices nose-dive.
Shares in Punch, the biggest, lost over three-quarters of their
value in the year to July. This was largely because of the huge
amounts of money that the company had borrowed to pay for building
its pub empire—over seven times the value of its annual
income. Just like home-owners who had borrowed over seven times
their salary to get their mortgage, then faced having to renew
the mortgage when interest rates are going up, credit is in short
supply, and property prices are falling, the over-borrowed pubcos
are not in an enviable position."
We consider that the ultimate costs of what
has in effect been the re-creation, through securitisation, of
these formerly brewery-owned pub chain monoliths bear all too
steeply on consumers. Our impression is that both the higher-than-inflation
increases in pub beer prices shown year after year by our annual
surveys and the significant regional variations in pub drinks
prices owe much to the influence of the biggest pubcos.
29 September 2008
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