Memorandum submitted by Rod Suffell
I am unfortunately an Enterprise lessee.
I do feel that these investigations seem to
be just revolving around in circles, I was very impressed with
the BEC report and their findings and how accurate they were,
however very disappointed with the OFT report outcome on the beer
tie stating "No one would be better off being free of the
tie" which contradicts the BEC report.
And with reference to Fair Pint and CAMRA and
the super complaint against the Pub Co model this was an actual
waste of time for me. I am an experienced operator who has worked
in this industry from 1975, and do strongly feel that the Monopolies
and Mergers Commission started the downturn in the public house,
power and phone companies.
The days when you would take a brewery tenancy
which was in black and white you pay X rent you are tied for all
draught beer which is simple, free to buy spirits soft drinks
one guest ale, cider no machine tie which meant the income from
the machines nearly paid your staff wage bill, but today brewers
are only allowed to operate limited pubs these days were days
when operators made money and paid taxes.
In brief being an Enterprise Lessee:
I was offered a house which was closed on a
low rent (TAW) £50 a week until a planned refurbishment,
after four months of trading and being successful the rent was
increased with an excuse that I was making too much money for
When the refurbishment finally started (twelve
months late) Enterprise stalled on negotiations for the lease,
I supplied them with detailed profit & loss accounts and projected
turnover with no response from the company. I was told that the
rent expected would be between £22k & £24.5k with
options of "Tied, Free of Tie or Volume on Discount"
I again submitted revised accounts for the options and informed
them that £22.5k would be the maximum for this house with
written and accounted proof.
During this time the builders have nearly refurbished
the house and being told by the area manager that my accounts
are not a million miles away you think in your head to go ahead
and by furniture and fixings for your new public house and venture
with Enterprise. Close to opening after spending £55k I was
told the rent is £28k tied only no other option available
take it or leave it. I have to pay extra for cellar cooling insurance
and building insurance although I can get the same cover for one
third of the price.
At this point I questioned the offer and the
previous proposals and was told if you do not sign the lease we
have someone waiting to come in, when questioned about my investment
into the premises I was told to take that as a loss. I feel misled,
deceived and bullied into signing a lease.
Enterprise Inns have not come up with any historical
trading figures or barrelage sales, they shunned my projections
and wrote down on a piece of paper £5.5k a week would be
my income so the rent equals £28k, year one after the refurbishment
I took £4.1k per week and now at the end of year two we are
at £3.2k per week which is £600.00 per year short
of my projected accounts which is the one thing I am pleased about
because I know I was not talking through my hat, and I could not
foresee the bad times we are in now. However I feel we have still
maintained a level of trade and held it.
Finally I must say I am not against the beer
tie but I think the amount of percentage profit added by Enterprise
is too high and it should be set at an acceptable level, The machine
tie is very unfair I pay the electricity to have these machines
on and I get less than 50% of the income. The monitoring of the
beerlines via Brulines is unethical, inaccurate I have been charged
£1,000 for buying in with evidence on a spread sheet
that I questioned being inaccurate but they still took my money,
I have read in the reports that the pubcos are
offering support to tenants, in 22 months I have seen my BDM three
times, once to say hello the second to tell me I am buying beer
out of the tie and the third after mailing him to tell him I have
heard from my accountant and I have made a loss of £3,000 with
a response I will come back to discuss this which was seven months
I could possibly write a book as large as the
holy bible with reference to Enterprise Inns and the unethical
codes of practice, I do feel that all the pubcos are strangling
the pub operators out of any profit which in turn reduces or totally
diminishes all tax revenue for the Government.
I would feel happy paying a fair rent like 12%
of total turnover buying my supplies 15% more than what my supplier
purchases them for making £60k a year profit and 40% of my
profit to the Inland Revenue knowing that money will go to improve
our country instead of a property companies, directors and shareholders
like Punch Enterprise S&N and Admiral.
18 November 2009