Pubcos 'must evolve now'
Tenanted pub companies now need to accept criticism and engage on how to evolve their business model, a panel of leading independent observers has claimed.
The MA assembled a group of six senior industry figures, three of whom have run tenanted pubcos, to give their views on the way ahead for the trade in the wake of the Business and Enterprise Committee report.
It follows the launch of the MA's call for the industry to work together to sort out concerns over the status quo, through our Trust in the Trade manifesto.
Bay Restaurant chairman Ian Payne, who owns two tenanted pubs and set up the Bass lease business in the 1990s, called for much more transparency.
He said: "I also believe that an open analysis of the rewards available to tenants should be made public, and I include in this the wholesale prices that the pub owner is charging the tenant. I have heard several of the large pubcos talk about developing a relationship of trust or a business commonwealth. The starting point for these aspirations is transparency on both sides."
Alistair Arkley, who has had two tenanted pub companies he founded bought by larger companies, argued that the time has come for a proper explanation of how the Fair Maintainable Trade method of setting rent works. He said: "If that's proved to be a complete fallacy then it should be adjusted and discounts added accordingly."
Clive Williams, who sold Celtic Inns to Marston's, backed the Bec call for the scrapping of the machine tie: "I'm not surprised by that at all. I think it's reasonable."
Time for talks
Trade consultant Phil Dixon said it was time for companies to sit around the table with representative bodies, such as the Association of Licensed Multiple Retailers and the BII, and determine how issues can be addressed in a manner that would satisfy Peter Luff and other Bec MPs.
"It's time for a bit of humility and accepting some justifiable criticism and suggestions," he said.
Ted Kennedy, who sold Mill House Inns to Punch and currently provides consultancy services for a major tenanted pubco, claims there is already an obvious difference in the reaction to the report between the two major pubcos.
"Punch appears to be the most positive and Enterprise, as always, is being dragged protesting to the table," he said. All six industry figures stressed the importance of avoiding a Competition Commission inquiry.
Trust in the Trade
The Morning Advertiser has launched a Manifesto for restoring trust between licensees and pubcos.
To keep politicians out of our business, the trade must show it can sort out its own problems. To that end, trade leaders must take the following steps...
• Amusement with prizes machines must be freed from tie
• Rent setting, and insurance, must become transparent
• Licensees must not be penalised for success. Long-term leases should offer free-of-tie option and reflect commercial property terms
• Cheap, quick and independent dispute resolution service must be set up
The Morning Advertiser is calling for a Group Of All The Talents to be set up to drive change. We back the Association of Licensed Multiple Retailers' call for such a round-table body to discuss and solve the above issues as quickly as possible.
All sides of the industry must be represented round the table.
A strong and independent individual, preferably with industry knowledge, should chair.
