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

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 myself.

  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, "bullied again"

  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 ago.

  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


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