Scottish lease-holders warned of business risks

Related tags New licensees Renting Leasing

A trade leader has come under fire for warning new licensees in Scotland they face a higher risk of business failure because of trading and lease...

A trade leader has come under fire for warning new licensees in Scotland they face a higher risk of business failure because of trading and lease conditions.

Scottish Licensed Trade Association chief executive Paul Waterson has warned licensees to "think more carefully than ever before" when contemplating a lease deal because of accelerating costs and bureaucracy.

He said: "Something like 1,200 bars have closed in Ireland since their smoking ban came in, in Scotland it's 400 and we're seeing the same pattern replicated in England, where perhaps 10 pubs are closing every week.

"In this sort of climate you obviously have to be more than usually careful before you sign a lease, particularly a long or inflexible lease. The most at risk are pubs with long fixed leases - trade is not conducive to market fluctuations."

Waterson argues the combination of start-up costs, high rent, Licensing Act costs of around £5,000 and a difficult market means leased pubs face extra challenges trying to stay afloat.

But his comments have been dismissed by the Scottish Beer and Pub Association, whose membership includes Scotland's main leasing players.

Chief executive Patrick Browne said: "We should stop talking the industry down and get on with running great pubs that customers want to visit, and which earn operators not only a decent living but a profitable return."

Punch Taverns has 451 leased pubs in Scotland. Operations director Chris Welham backed Browne's stance.

He said: "Less than 10 per cent of our Scottish estate is currently on a temporary agreement, of which there are only 19 sites where we are actively recruiting new licensees. This compares favourably with others in our peer group."

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