Pub Companies - Business and Enterprise Committee Contents

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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