Pub Companies - Business, Innovation and Skills Committee Contents

Written evidence submitted by Carol Ross

I enclose two letters dated 2004 and 2005 which was I think the start of the problems with the large Pub Companies. They became a property company. This I believe is evidence which highlights the bullying of licensees, to change over to leases in their favour, which led to the demise of many pubs, with their high rents and unfair tie. I asked them for help not a new lease. They told me my old vanguard lease was no longer available. They could see a different way to charge more rent and earn even more from the tie. They became very greedy. They let a lot of licensees down.

When the Inquiry gave recommendations in March 2010 to let the Pub Companies get their houses in order, this only resulted in more pubs closing.

Punch Taverns have given out Codes of Practice but they are not adhering to them; for instance:

My lease was up for rent review on 13 February 2011. Talks only commenced at the end of last year (their Code states they will commence talks 12 month prior to review). I provided them with six monthly figures in September for the BAM Report to be completed, they did not use this format (they used another format without my expenditure. My rent review should have been sorted out by now but they are refusing to put my figures in the format set out in their Code of Practice. I gave them all my figures for end of year 2010 mid-January to enable our review to be sorted by 13 February, the due date. I have continually asked for these figures but they refuse to put them on the format outlined in their Codes of Practice. I keep asking my BRM how he arrived at the rent figure without my expenditure—he says Fair Maintainable Trade.

I informed them that we could not survive at the current rent and beer tie. I asked for rent reduction which they gave me £7,000 but with index linked RPI and all tied beers, bottles and guest beers. I informed them that there was not enough money in the pub for the high rent and beer tie. I also asked them for free of tie, they refused point blank and said this was not an option.

Punch Taverns have given landlords more choices of ales, which was only due to the pressure they were receiving from the press. This does not take away the fact that, the invoice from DDS goes direct to Punch Taverns, for them to add their margin onto the invoice from suppliers before it is sent on to ourselves. We cannot get the beers at market value. This is no different we are getting a little more choice—that's all, at their over-inflated prices. We have to pay more for our beer than a free house. In some pubs Punch are making more money from tied beer sales than on rent. We are worse off than a free house.

I also enclose a letter sent to Roger Whiteside recently.

I have also offered to purchase my pub as I would be paying less mortgage and also be free to buy my beer. They refuse to sell as they are making a lot of money from my pub. Therefore I hope the BISS Committee will find in the favour of the hard working licensees out there and bring the Great British Pub back to life before we lose them for good.

21 June 2011

Letter from Carol Ross to Punch Taverns Ltd (Dated 25 October 2004)

Thank you for your letter dated 20 October 2004, the contents of which I note.

I will adopt the same numbering as your letter and would comment as follows:

—  1.  I do not believe The Roscoe Head would benefit from this Growth Lease on the following grounds:

—  (a)  Discounts you allow on my Tetley's would not benefit me in the future as my Tetleys' sales are diminishing, and, due to my customer comments, my customers would like different guest beers, on which you allow minimum growth discounts.

—  (b)  Although all information and figures remains constant for the last 12 months, I believe when we have a refurbishment my customers would be looking for a varied choice, as my competitors provide. I believe that if we do not offer this, the Roscoe Head would be way behind its competitors, and will not grow trade.

—  2.  If I remain on the current Vanguard lease I would comment as follows:

—  (a)  No different.

—  (b)  I think this is still too high, but would consider with provisos.

—  (c)  I believe this interest free loan is very fair indeed.

—  (d)  I believe I should be offered a new 10 year lease.

—  (e)  I believe this would be detrimental to my business as my customer survey reveals they want ever changing guest beers, which the company cannot provide on that scale.

—  (f)  Would consider.

—  (g)  I would consider this to be very fair due to my cash flow problem.

—  (h)  Noted.

—  3.  I believe this to be of no benefit to either party.

However I would consider option 2 above providing I could still have guest beers (in the form of perhaps two beer festivals per year), with the company providing all guest beers, and all guest beers to be calculated within my Vanguard Incentive Scheme. Also the scheme commencing as soon as possible.

At the time of writing this letter the Pub is already leaking in water, from the back walls and I am afraid that if we do not act soon, we may have to close off the back room, therefore a spend is vital to the pub.

I note from your second paragraph that you value my commitment to the Roscoe Head, if that is so, I would ask Punch to think about a new 10 year lease being signed, as it would take me more than three years to see any return on my investment into The Roscoe Head also.

I too am looking to be able to agree terms of investment and also ask that you consider my proposals.

As can be seen from my P & L accounts, I am in a no win situation and have asked Punch for help to grow my business. I am sure Punch would not like to see me go bankrupt six months down the line.

Hoping we can bring this matter to a speedy recovery.

Kind regards

Carol A Ross


Letter from Carol Ross to Punch Taverns Ltd (Dated 16 August 2005)

I refer to my letter dated 5 October 2004 and your reply dated 26 October 2004.

I wish to bring to up to date on matters regarding the Roscoe Head as according to your letter, you are of the understanding that the meeting I had with Jonathan Walters was very positive. I am sorry but I did not feel the meeting was positive at all. I was given three options one of which I took (option 2) but still nothing has been sorted out. I felt as if I was still being bullied into going for the growth lease, this would not benefit the Roscoe Head.

I feel that the Company are penalising the Roscoe Head because of its success over the years. There are very few small pubs left, the Roscoe is very lucky to still be trading, due to the onslaught of the big themed pubs that have opened in Liverpool. The success of the Roscoe is due to the sheer hard work from myself also my family in the past and the amount of regulars that we have kept over the years, people who come from afar for the good beer at the Roscoe. My customers and myself have become very upset at the bully boy tactics used by Punch management in their efforts to gain premium rents as well as unfair ties, in that there is no effort on behalf of the company to help the licensees who have been loyal to the company for many years. My customers are a big part of my pub and they know everything there is to know about it. They feel that Punch are trying to push to get me out as they have already informed me that the pub is worth nothing, but the land is worth more.

Two years ago my rent was up for renewal and I knew I could not afford a rent increase, I informed my area manager and requested a rent reduction (see 8th paragraph in my letter to you dated 5 October 2004), as The Roscoe Head was struggling and I needed some help. Andy Wilkinson informed me that the company did not consider rent reductions, however the company could help me with possibly a refurbishment, with my rent staying the same or at worse maybe a little increase in rent. I was very shocked when they came back with £12,000 rent increase. The Roscoe Head is far too small to merit this increase and not gaining any more space but losing two seats. I have only been the licensee here for three years and it is due to the lack of money spent in the past that the dilapidations were not met.

The Company has never spent any money on the Roscoe Head for over 20 years and over this period my family and I could have bought the Roscoe Head many times with the amount of rent and tied beer sales which the Roscoe has paid to the Punch.

Two years ago when I come up with a business plan for the Roscoe Head I put down my fears as to what would happen with the new competition opening up around us (ie Okell's in direct competition with myself). Unfortunately those fears are now a reality and I am struggling ie cash flow difficulties and no money for dilapidations, some of which dilapidations were the responsibility of yourselves from eight years ago when the company promised to do the roof and outside of the building when the lease was an old tenanted lease where the Company were responsible for the outside.

At our last meeting the Estates Department informed me that the amount of money that needs to be spent on the pub would have to push the rent up even further than £12,000. As this is not feasible I believe we have reached a stale mate.

I am in the process of trying to refurbish the inside of the pub myself as it is two years since we started talks on refurbishing the pub, the inside is looking very tired and I refuse to let my pub go down without a fight, which brings me to my rent review two years ago which I refused to sign as I was hoping for a rent reduction. As talks have broken down, I would like to take this opportunity of seeking independent advice on a fair rent for the Roscoe Head and would be grateful if Punch could arrange this for me.

I have been in touch with CAMRA who have allocated monies for small pubs in difficulty, I have explained my situation to them and I am awaiting a reply from their Head Office but they do not hold out much hope as the Roscoe head is owned by a big company such as Punch.

As the new flats in Roscoe Street open in November of this year I feel as I must do something to the inside at least to attract new customers and to make them feel comfortable. To enable me to do this I am asking Punch to consider reducing my rent for the future.

I am asking the company for help as we have seen far too many small traditional pubs close down in the past. I hope the company will look favorable in this matter.

Kind regards

Carol A Ross


Letter from Carol Ross to Punch Partnerships (Dated 22 June 2011)

I refer to your comments in the Morning Advertiser on page 17 under the heading Enterprise: MP's comments "irresponsible".

Mr. Whiteside with all due respect I don't see or hear anything that Punch or Enterprise are giving to the licensees who are holding the Pub Co's up. I understand what you are trying to do, you are trying to get people to see Punch Taverns in a different light I.e. Referring to us as "partners" and spending the money on pubs (well some pubs). May I say that this is a little too late for some. The majority of people do not trust Pub companies any more, there are people out there who have lost their jobs, homes and life savings. There are people out there who blame the Big Pub Companies for the demise of the Great British Pub through their own greed at achieving "fundamentally flawed" rents and if that is not bad enough they are still earning from the "very much talked about 'unfair tie'".

I appreciate what you are trying to do, there is no value for Punch if a pub is closed so it must be open to have a value for its estate. But you seem to be overlooking the people who have been successful and who have worked hard to keep their pubs open. We seem to be victims of our success here. When will we get help, "when we close our doors" because with my rent and tied beer it is not very far away, I work for the minimum wage, and I believe it is time for me to work for somebody else as, gone are the days when we expect 50% gross profit. I think this is what the gross profit percentage is to work for yourself and to earn approx. £20,000/£25,000 a year as a fair salary, otherwise there is no point working for yourself. But to Punch we have to work for minimum wage and also according to your BDM's we should not expect 50% GP. Therein comes the prices we have to pay for our beer.

I am a licensee who has asked for help since 2008, two years down the line I have still not received any help I am one of the pubs just surviving but earning the minimum wage. My pub is on the market for sale but I cannot sell. Yet nobody from Punch has helped me. Punch seem to be helping the pubs which are closing down or already closed.

I enclose a letter I sent to Punch Taverns Mr. Hodgson on 4 June, forwarded to the right Mr. Hodgson on 7 June but nobody has even the decency to reply.

Mr. Whiteside I see you joined the pub trade fresh so I invite you and Greg Mulholland to my pub in Liverpool to show you where my pub is, I am stuck in a back street where nobody knows I am here, I have to work twice as hard to keep my pub trading. I think it is damn harder to keep a back street pub trading than a pub on the main road. I will take you through my 30 years of working for the managed house side and then the tenanted side. Those days managed house top people demanded 60% GP wet and 75% GP on food. How things have changed when we (your partners) are expected to work for the minimum wage and achieve less than 50% GP. I am afraid to say some of your BDMs need to be retrained as these figures don't add up, if there is one thing I learned from having my own business it was the minimum GP I had to achieve to make it worthwhile running my own business. Some of your BDMs do not understand these mathematics. They think the answer is to put our prices down to compete with the Supermarkets.

Also on your visit I will take you through the last five years correspondence with Punch leading up to my dissatisfaction and the lack of help I have received from the Company. My family have won many awards for this pub over the years. I am afraid they do not deserve the good licensees out there.

I apologise if this letter seems to you a little bullish but, I am afraid this is the same way I as a licensee have been treated over the last five years, with a very bullish attitude and also I have nothing else to lose as you will note from my attached letter to Mr. Hodgson.

The reason I am still at the Roscoe Head is this is also my home.

Carol A Ross


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