Pubcos need to take more care with the heritage and tradition of Britain's Pub culture.
In fact the name ‘Pubcos’ is a bit misleading, as they have no real interest in brewing or maintaining Britain’s pub heritage.
Many are actually property companies plain and simple, whose estates are made up of public houses. The pub business model is not flawed, evidenced by the number of ex pubco houses which are now flourishing as free houses, but the pubco business model is if it was ever the intention to see it as supportive of the pub industry. If they can see a better and more profitable use for a property there is now an established trend that they will deliberately make trading difficult through their costing model, so that the pub business closes, leaving an empty, boarded up building ripe for profitable conversion into retirement flats, commercial properties and so on.
The Forum has experienced an increasing number of pub operators joining us as members, looking for the support, advice and protection we can give them, in increasingly difficult trading conditions.
The British Pub Confederation have called on the Government to plug a loophole in the Pubs Code which allows, and even incentives, pubcos to churn tenants and deny them the Market Rent Only Option. This drives the development profiteering, putting potentially profitable pub businesses under pressure for their own commercial ends.
When investments are made in a pubco managed property this invariably is entirely paid for by the tenant. Increased rents are frequently sought, and higher beer prices imposed, with tied tenants often paying 40-50% more than a free of tie tenant would.
The Forum have many examples of this kind of behaviour from our members who run pubs.
We have cases too of Pubcos exaggerating the cost of this investment work, quoting premium prices for the services charged when they have in fact been given discounts from surveyors and contractors.
The Forum operates a Hall of Shame for businesses it feels are exploiting smaller partners, be it late payment of suppliers, uncompetitive practices or in this case the unfair treatment of their tenants. We will be writing to the Pubco management seeking clarification on their actions with a view to entering them into the Hall of shame.
These are not brewers who have a vested interest in their brand and view the pubs as a shop window for their products and tenants as true partners. They are property companies who are currently destroying large chunks of Britain’s pub heritage for their own commercial ends and the sooner government and the wider public wake up to this fact the better.
Ian Cass, Managing director, The Forum of Private Business