Pub companies: follow-up - Business, Innovation and Skills Committee Contents


Supplementary memorandum submitted by Phil Liddell

  I don't feel I am qualified to comment on the RICS recommendations, not having read the report, however, their apparent re-alignment of their guidelines for rent calculations based on divisible profits and their interpretation of FMT is a step in the right direction. I feel that David Wakefield is far better qualified than myself to assess these changes, and puts forward many valid points which I thoroughly agree with.

  Your second point, the BBPA's agreement with the BII and FLVA is a total white elephant—there is no substance to it, there is no meat on the bones. A voluntary agreement is useless—the likes of Punch Taverns and Enterprise Inns have ridden roughshod over similar codes of practice instigated by the BII, and their breaking of such have only warranted a slap on the wrists. The major Pub Companies will not voluntarily adhere to any practice that might erode their profits and give a fairer share to their tenants. They have demonstrated this in their attitude of contempt at the findings of the TISC Report and the latest BEC Report. Unless codes of practice are clearly defined, are agreeable between all the major players—tenants included, are mandatory and legally binding, the Pub Cos will continue to treat tenants unfairly. Don't forget the BBPA membership primarily consists of Pub Co employees and interested parties, and is funded by the Pub Cos. They have their paymasters' interest solely at heart. It's noticeable that the bodies who represent the tenants such as the FSB, Unite and Fair Pint, have not signed up to the BBPA allegiance.

  An Independent rent review scheme funded by the bodies involved rather than independent tenants would be the way forward, with a blueprint for formulating rents, with variables set according to location, economic climate, footfall, and trading area.

  The formation of the IPC is the only good news to come out of the breakdown of the mediation process. It is a true alliance, and one with a spectrum of interested parties. To have so many diverse bodies agreeing in principal to a basic manifesto, highlights the pub companies self interested views.

  There has certainly been no change of stance from my Pub Company Admiral, since the publication of the BEC Report. They still refuse to allow me to source my own Buildings Insurance, they refuse to supply me with a copy or a schedule of the policy (if it exists), and they certainly refuse to provide financial help to their "business partner" in such a grave economic climate. This is despite irrefutable evidence presented to them that their rent and tied product charges are too high. Copies of my correspondence are available on request.

  Admiral's most recent proclamation on their website also makes a mockery of intentions to change—voluntary codes cut no ice with these ruthless operators:

    "We're pleased to announce the successful completion of a financial restructuring which provides a stable foundation for the future.

    This move marks an end to recent speculation about Admiral Taverns' future and places us on a firm footing. There will be no impact on the day-to-day operations of the Group; business will continue as usual and the current management team will remain in position.

    Our main concern throughout these negotiations has been to minimise disruption to our staff, partners and suppliers and we are happy to say that we have achieved this."

  Landlords, tenants, suppliers and contractors should also be unaffected, and will continue to do business with is as they have previously.

  This recent intervention of Lloyds Bank to bail out Admiral Taverns to the tune of £650 million, having previously written off debts of £450 million in June this year, makes a mockery of the OFT's non-intervention in the super complaint brought about by CAMRA on the basis that the "tied model" is robust—ie that no major Pub Companies are in financial difficulties. Intervention is required immediately, and policies instigated without delay, if the tenanted pub sector is to survive. It won't survive in the hand of the Pub Companies, though they will simply re-form, leaving thousands of individual tenants and lessees bankrupt, homeless with savings and pensions decimated.

19 November 2009






 
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