Written evidence submitted by Russell
Stone
EXECUTIVE SUMMARY
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.
INTRODUCTION
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.
FACTUAL INFORMATION
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.
RECOMMENDATIONS FOR
ACTION
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.
COMMENT
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.
30 Ev not printed Back
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