City Diary — 18 June

Tchenguiz will return — but not yet

Pub industry investor Robert Tchenguiz is keen to put his side of things after many blamed him for the Mitchells & Butlers swap debacle. He tells the Financial Times that when he and M&B agreed to a £4.5bn property joint venture in 2007, he offered the pub operator the right to buy back R20's shares in the venture, in which R20 was to contribute £250m, "for a modest return" if a profit materialised. He says: "That was a big ask. Nobody does that. I didn't see anybody say that this was a good shareholder who looked after other shareholders alongside him." Tchenguiz insists he will be back, but in a cuddlier form. "I wouldn't be as aggressive as I was before. I am a bit older now. But to do any business in 2005, '06 and '07, you had to be aggressive." For now, though, there's a legal battle with Kaupthing to keep him busy. "I'm not doing business now. I've got to sort out a few bits and pieces."

Gaming machines get early green light for stake changes​

Gaming machine operators faced a rush to install the country's first £70 jackpot AWP last week after it emerged that the green light for the new stakes and prizes effectively came in two days earlier than expected, on Wednesday.

The industry believed Friday was G-day, and officially it was — technical aspects of the changeover weren't rubber stamped by Europe until then. However, the Gambling Commission gave assurances that no action would be taken against anyone who installed the fun boxes from Wednesday, after Gerry Sutcliffe, the minister for fun, approved the changes.

An industry source said: "Some people see this as a cock-up. The whole industry thought changes would take place on Thursday night and Friday morning." A spokesman for Gamestec was "fairly confident" it was first to fit the first new machines, having changed six AWPs at JD Wetherspoon's Becketts Bank in Leeds by 12.10pm on Wednesday.

Steve Hawkins, boss of Essex Leisure, said his company installed eight new AWPs at Hamilton Hall at London's Liverpool Street station, another JDW site. Hawkins conceded that his were installed by midnight on Wednesday because Hamilton Hall — reportedly the biggest gaming pub in England — is too busy to fit the machines during the day. Fair enough.

Oh to have some frank figures​

Philip Sambell is a gamekeeper turned poacher. He was a senior executive at tenanted pub company County Estate Management who moved to the frontline by taking a Punch pub. Sambell now regularly posts distressed messages on the Morning Advertiser website that indicate he's having a pretty torrid time. Last week he noted on the issue of business risk: "Perhaps the deliberate misrepresentation of trade figures in brochures and financial statements given to prospective tenants is the true risk —

as our company has found to its cost!"

Private Eye spy will be a regular​

City Diary invited calls last week on the identity of Private Eye's new columnist who is writing, in scathing terms, about the sector and major tenanted pubcos. There was blizzard of calls last Thursday when the Morning Advertiser hit doormats. Turns out, though, that the column is to be regular feature, according to a Diary informant. The author looks like he's getting a little more accurate with his facts — the piece reports that Enterprise and Punch own 15,000 pubs between them, down from the last claim of 18,000 pubs.

Dallaglio to dish up Italian sauces​

Former England rugby captain and pub owner Lawrence Dallaglio — he owns a slice of the freehold Havelock Tavern in London — is launching a range of cooking sauces. Drawing on his northern Italian roots — his father Vincenzo grew up in Turin — he has apparently found an old family recipe and teamed up with Italian food producer Saclà to create a new range that will be stocked in most supermarkets this September. On his pub investment, which he acquired in 2007, he says: "Time will tell if it's been a good investment. It's not the ideal time to be getting into the pub business, but it's a freehouse, so we can choose what beers we have, and hopefully the property will grow in value."

Cobra's 20 years in the red​

Cobra Beer collapsed into administration a fortnight ago leaving unsecured creditors £75m out of pocket. The company, led by Lord Bilimoria, would make a fascinating case study at business schools — managing, as it did, to exist for two decades without scraping into the black once. One Times website blogger says this: "Massive amounts were spent on marketing the brand — both above the line and below the line. As a results, sales grew, but given the high marketing spends, there wasn't a penny in profits in its 20-year existence."

W&Y's patience exhausted by bills​

It was Bedford brewer Wells & Young's that blocked attempts to set up a creditors' voluntary agreement at Cobra. It seems that patience at company headquarters

in Bedford, where beer had been brewed for many years, ran out over unpaid bills. It appears that W&Y's credit insurers advised the company not to vote for a CVA. A W&Y spokeswoman said diplomatically: "We wish Cobra Beer all the best in the new company chaired by Lord Bilimoria, and we will now turn to our credit insurers for settlement of the debts."

FSB boosted by Bass businesses​

Ever wondered why the Federation of Small Businesses has so many licensee members?

Trade guru Phil Dixon has shone a light on this one. Turns out that Ian Payne offered to pay for lessees of Bass to join up back in the early 1990s as a way of encouraging professionalism. Payne tells City Diary he was intrigued to hear Enterprise boss Ted Tuppen offering to fund a licensee support group, given Fair Pint was the only body giving evidence to the Bec committee on behalf of licensees. "It's really strange — it's gone full circle," he says.

An art acolyte or a troglodyte?​

Pub design is a slippery fish. But Wetherspoon boss Tim Martin has put together a theoretical framework for what works and what doesn't. Pub-goers are either cave dwellers or arty types. "Cave-dwellers, like my good self, prefer a pint of Abbot in a dim, dark place with artificial light to read even on a summer's day. More enlightened, arty types prefer a light and airier environment. "Never the twain shall meet."