Pub Companies - Business, Innovation and Skills Committee Contents

Written evidence submitted by Russell Stone


1.Highlighting the rent review process from ETI was totally unacceptable.

2.Rental-increase proposal totally unacceptable on all five occasions of rent determination from ETI.

3.Alleged bullying from ETI towards Leaseholder and their own 'Independent Valuer' to achieve an unfair and unjust rental increase.


I have spent over 30 years in the Restaurant business; my last roles were as a Director with well-known High Street brands.

In July 2006, I became a Leaseholder (30-year lease) of the George Pub, to run with my family.

The Lease is with Enterprise Inns (ETI) - Partial tie with a rent of £30 thousand per annum, to be reviewed every five years.

The last rent review was September 27 2005, which saw the rent increase from 28 thousand to 30 thousand.

My first rent review was to be September 27 2010.


All information that follows is backed up by a "Audit trail" of events from 23 March 2010 until 13th April 2011.[30]

Relevant letters and emails to ensure no question of any doubt surrounding the facts in this matter back up all "audit trail" events.

1.Highlighting the rent review process from ETI was totally unacceptable

1.After chasing the Regional Business manager for several months to start the rent review proceedings, I receive a letter dated 30th June 2010 (around 11 weeks before rent determination date) to move my rent by 170%.

2.Second rental figure of 100% increase is given to me on July 15 2010.

3.I get the "proper" detail of the 'working out' of this 100% increase from the rent controller of ETI on August 4 2010 (seven weeks before the rent determination date).

4.I start the PIRRS action on October 11 2010—pay my fee on December 23 2010—ETI eventually pay their fee around 22 January, further delaying the process of PIRRS.

The timescales of this process are unacceptable—which were driven by ETI

The fairness of the rent bid is unacceptable—which were driven by ETI

2.Rental increase proposal totally unacceptable on all 5 occasions of rent determination

1.Initial rent proposal of 80 thousand (170% increase)—June 30 2010

2.Second rent proposal of 60 thousand (100% increase)—July 15 2010

3.Third rent proposal of 51 thousand (70% increase via calderbank offer)—August 31 2010

4.Verbal offer of 46 thousand from rent controller (53% increase)—September 16 2010.

5.ETI "Independent Valuer" bid of 52.5 thousand (75% increase)—March 9 2011

The outcome of the PIRRS rent determination was around 29% increase—considerably lower than any of the five rental offers from ETI. (April 13 2011)

3.Alleged bullying from ETI towards Leaseholder & their own 'Independent Valuer' to achieve an unfair & unjust rental increase.

1.Four of the five outrageous rent proposals from ETI over a period of three months would, in my opinion, appear to constitute bullying.

2.The divisional director of ETI wrote to me stating that the rent controller of ETI concurred with the Regional manager's assessment of rent, which was not true. (July 23 2010)

3.The independent valuer for ETI, stated that his work was being questioned by ETI during the PIRRS process.


1.Employees for Pub Companies should not be involved in rental determinations without Independent input.

2.Code of practice for Pub Companies in relation to rent review timescales and transparency must be improved further.

3.Independant valuers cannot fulfil their roles if they rely on the business from Pub Companies and allow themselves to be undermined by the Pub Companies—This needs to be addressed by maybe:

Benchmarking within the Pub Industry to simplify workings of FMT.

Further work of sales per square footage of Pubs.

PIRRS to move forward to execute all rental determinations at a lower cost and a speedier timeframe.


As a "newcomer" to the Pub Industry as a leaseholder trying to run a small business, my experience over the last year has been nothing short of appalling.

My business and the business relationship with ETI has been put at risk and has left me "battered and bruised"—which was totally avoidable if the Pub Company had done its job right.

Unfortunately, as I have found out since this whole experience began, I am not alone in this kind of situation.

It must be noted that the Chief Operating Officer of ETI did visit me near the end of this saga to apologise, but still did not see what a fair rent was at my small village Pub.

In my opinion and through this experience, the real reasons for Pub closures (and I accept some had to close) are far too high rents and inflated beer prices through the Pub Companies.

Pubs are not just a potential small business opportunity for individuals or families, they are not just profit generators for Pub Companies, potentially at others expense, they are also "hubs of the communities" and an English tradition that can serve more good than any harm.

We need to understand the difference between what a traditional Pubs' role is versus the High Street liquor venue.—In my opinion we need to manage them totally differently.


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Prepared 6 October 2011