Pubco giants under attack over high rent and beer charges

Lessees across the country claim they are being put out of business by the high prices giant pub operators charge for rent and beer.

The problem has become far more serious, they claim, since financial institutions like Japanese bank Nomura and Texas Pacific, which owns a stake in Punch Taverns, started buying up huge swathes of the UK's pub market.

Licensees claim in extreme cases a pint in a JD Wetherspoon outlet is cheaper than what they pay under their tie agreement.

At the Rising Sun in Gravesend, Punch lessees Martin and Dee Partridge calculated that their Stella Artois is 35 per cent more expensive than that from the local wholesaler.

They said high beer prices meant they would be better off running a bar for a managed pub company.

While this issue is not a new one, they claim that giant pub-owning companies are squeezing licensees by putting up rents and beer prices to try and maximise profits for their City-based backers and shareholders.

The issue reared its head on the eve of Punch Taverns' proposed flotation on the stock market earlier this month.

The company initially abandoned its float before reversing its decision seven days later.

Now lessees say they are prepared to fight for their livelihoods.

One lessee, who asked not to be named, said: "The people who run these companies don't have any real interest in the pub trade. If they would just lower their beer prices and rents they would actually get more money out of these pubs but they just see the estate as a cash cow to be milked. All the lessees I talk to feel the same."

But corporate consultant Peter Hansen disagreed. "I'm not an apologist for tenanted pub companies," he told thePublican.com, "but this is just not true. Most pub companies know that if the tenant is in financial distress, the pub will not do as well."

Francis Patton (pictured)​, commercial director at Punch, said: "The thing that drives this business is that we do not do well unless the licensees do well. Most of our licensees are happy - it is a minute problem.

"We are very up front with licensees - they go into this with their eyes wide open.

"Yes, we need to make a profit and yes, beer is available at a cheaper price if you are in the freetrade. But in the freetrade you don't get what we provide - training, a business development manager, a small business adviser, a head office and customer service support."

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Related stories:​

Punch Taverns float resurfaces (21 May 2002)

Punch pulls flotation (16 May 2002)

Pubcos hit back at FT-Punch story (15 May 2002)