Enterprise toughens line on buying out
Enterprise Inns chief executive Ted Tuppen has claimed that a tougher line over buying out has led to an increase in closed pubs and pubs where licensees are awaiting eviction — the figure stands at around 200 pubs.
He described buying out of tie as the equivalent of stealing. Tuppen said: "We're taking no truck with those who deliberately breach the terms of their agreement. They risk gaining Robin Hood status. But if licensees breach their supply terms, they're stealing from us."
Tuppen added that the company gave licensees one chance to repay what they owe if they're caught buying out, then they're thrown out if they continue.
The company reported in its trading statement: "Whilst the majority of licensees comply with the terms of their agreements and work closely with the Enterprise team to develop trade and improve profitability, there are some who fail to meet agreed payment terms or who blatantly and consistently breach their obligations under the tie.
"We take a straight-forward stance in these circumstances, preferring to terminate agreements and remove the offending licensees. This has led to an increase in the number of closed and holding over pubs, the latter where the licensee remains in occupation without paying rent or buying beer pending settlement or eviction."
Tuppen claimed that Enterprise was "reaping the benefits of getting rid of those breaching their terms." He reported that pubs saw an average 12 to 15% increase in beer volumes after the arrival of a new licensee compared to the 12 months prior.
He also insisted, though, the company was budgeting to provide the support required in the coming year for licensees — Enterprise is expecting to spend between £10m to £15m on support in the current financial year.
Chief operating officer Simon Townsend said: "Who knows what's going to happen over the next six weeks, much less the next six months. (The economic climate) Is likely to be even tougher."
