Greene King splits Pub Partners business
Suffolk brewer Greene King has split its leased and tenanted pub business into two divisions - some 18 months after adopting a similar approach with its managed estate.
The group's Pub Partners arm announced last week a major overhaul of its business, which would create the two pub divisions.
Four hundred leased and tenanted pubs will be part of a new entity, the Independence Pub Company, overseen by business development director Andy Spence, while 1,060 will remain in the Greene King Pub Partners estate, with operations directors Steve Worrall and Matt Kearsey overseeing that business.
Pub Partners managing director David Elliot described the reduction of the number of pubs looked after by a regional manager from 60 to 44 - just one outcome of the changes - as "radical".
The move meant a greater level of support can be focused on its businesses, Elliot added.
Greene King said the changes had been introduced "after the business recognised that managed pubs were responding much more quickly and effectively to the cultural changes the pub industry faces and to ensure tenanted pubs had the same opportunities".
The brewer said its Independence pubs, run by "self-sufficient entrepreneurs", would require less central control and management. As a result, 60 pubs would remain with regional managers within this division.
The changes include the launch of a three-year tenancy agreement and 10-year lease, with what Greene King described as a selection of negotiable terms.
Speaking about the changes, Elliott said: "This innovative approach to our business model will help ensure we can support licensees to maximise the opportunities in their business for the long term.
"We're offering prospective licensees, entrepreneurs and multiple operators flexible terms including some free-of-tie options, a select number of pubs with the right to purchase after a guaranteed trading period and fixed rents excluding RPI for the period of the agreements."
The move was part of the evolution of the pub company model, Elliot claimed. "Pubs have changed massively over the past five years and for any pub company to stand still would be ridiculous and damaging," he said.
"Pub Partners has always led the way and these changes will not only attract more entrepreneurs and multiple lessees but grant us, and our licensees, a long-term and very successful future," he added.
In March 2007, Greene King split its near-800-strong managed pub estate into two divisions, Local Pubs and Destination Pubs.
The former, comprising around 500 more community and town-local venues, is overseen by ex-Sainsbury's retail operations director Jonathan Lawson, while the 280-strong food-led Destination operation is run by ex-Hardys & Hansons managing director Jonathan Webster.
