Pub Companies - Business, Innovation and Skills Committee Contents

Written evidence submitted by Huw Jones


—  Enterprise did not start the rent review process in a timely manner. The first quote we received was dated less than a week prior to date the new rent was due to be in place.

—  The Enterprise representative promised information verbally and then refused to provide it when requests were made in writing.

—  Enterprise did not explain their calculations or assumptions relating to the figures they provided us with.

—  Prior to a meeting the Enterprise rep agreed via email that minutes could be taken and distributed for sign off as accurate. Information was promised in the meeting but when the minutes were distributed for sign off the rep stated that they were simply our notes of the meeting and would not sign them off.

—  In the same meeting the rep was obstructive and rude as well as either feigning ignorance or being unaware of basic finance and business practice.

—  The Enterprise representative ignored most questions posed in writing.

—  During our final meeting Enterprise came with two representatives and showed us settlements from prior arbitrations. They were a number of years old and related to premises nothing like our premises. It was a fairly clear intimidation tactic as they showed settlements where rent was a much higher percentage of turnover compared to what they were offering on our premises.

—  Subsequent to the issuing of a Calderbank offer from Enterprise we were still trying to debate the validity of their figures and engage in dialogue about them to avoid arbitration. The final pieces of feedback we received were from the two reps we had been dealing with. Both were notional P&Ls demonstrating their position in terms of the rent but had significantly different figures within them.

—  Overall there was no identifiable process.

1.  We sent our P&L to Enterprise in early March as the new rent was due in place on 1 May. We requested that the process be started but did not receive a quote until the end of April. This did not contain the analysis promised and was described as an offer to reduce our rent from £48k to £44k despite the fact that our current rent was £41.5k. This was pointed out and concede after we produced recent rent invoices. We received no further information until a new quote for £41k arrived a week later.

2.  We requested analysis of turnover, margin and overheads but they were not initially provided. We had to pursue these and did get them in the end but they were clearly not representative. When queried on this the response was that it did not matter what we thought of the figures as changing them would not result in a change of rental offer.

3.  Numerous times we were promised information verbally but it was never provided (margin analysis).

4.  We were very concerned by the fact that the rep was willing to agree to minutes being taken prior to a meeting but would not sign them off afterwards. We had arranged this as we thought he was misrepresenting his position. We also arranged for a second rep from the estates department not involved in the rent review process to be present.

5.  Enterprise state they consider fair maintainable trade and average competent operators when calculating the possible trade of the pub. We had been assured verbally by the Enterprise rep repeatedly that we were excellent pub operators and were exceeding fair maintainable trade. Despite this the Enterprise quote contained a profit figure of 14% higher than out latest accounts. We thought this was inconsistent and had queried these figures strongly. In the meeting we asked what if we were better than average competent operators and whether we exceeded fair maintainable trade. This was met with laughter and we were told it was a ridiculous thing to ask. These are Enterprises measurements and they seem able to quantify them to produce their estimates so we looked on these as rude and unprofessional.

6.  We had been querying the margin % figure as Enterprise stated it used the costs and sales prices associated with our pub. Enterprise calculated it as 4% higher than we did. We produced a weighted sale average to back up our figure but the Enterprise rep claimed that something like that was not something they would do. Eventually it was conceded that it was and that he would provide it. This information was never provided and the rep subsequently stated via email that they were not required to provide anything more.

7.  After this meeting we distributed the minutes for sign off but the Enterprise rep refused and reneged on the promise to provide information he had made in the meeting. We countered that the 4% difference was £12k in profit that we as a pub were not making and that he should demonstrate his calculation as either they were using incorrect information in the rent review process or he (as our business development manager) should show us how we should be making this extra profit. He refused so we asked for his line managers details as we thought that either he is carrying out the rent review incorrectly or deliberately not fulfilling his role as our BDM. He refused this request for his managers details twice.

8.  Our final meeting involved the Enterprise rep we had dealt mostly with (our BDM) and a more senior rep who oversaw rent reviews over a large area. Enterprise had often stated that rent was viewed as a percentage of turnover and talked about the possible range. In this meeting we were shown a number of arbitration settlements from other pubs. These were old or not pertinent and the progress of the meeting appeared rehearsed.

9.  The last information we received came on the same day from the two reps we had the meeting above with. One showed high turnover and high costs and the other low turnover and low costs. Both came to roughly the same rental figure by calculation but from different angles.

10.  We wanted to go through a defined process but that did not happen. We were never engaged in meaningful debate about the trading levels and cost profile associated with the pub. The rep behaved in a misleading manner which hindered the process.

11.  We have numerous emails and other information to back up all of the above but it would lengthen this submission significantly. We are happy to provide this separately.

6 June 2011

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Prepared 6 October 2011