The devil will be in the detail
First Punch. And now Enterprise. The two dominant pub companies, who've made the weather for the tenanted sector over the past decade, are now both saying they agree with the Bec report and will quickly make what they claim to be significant changes.
We've already praised Punch for its commitment to a new era of transparency and fairness. We've also pointed out that while the new MD inspires confidence, we've yet to see how his refreshing business philosophy translates into a truly better deal for tenants. AWP concessions are a good sign — and other pubcos have quickly followed this lead. But, as usual, the devil will be in the detail of new lease terms and rental calculations. Until we get a better idea of how lessees are to be given a fairer division, through rents that incentivise rather than penalise, we must all reserve judgment.
The same is true of Enterprise's apparent change of heart. Its letter this week to Lord Mandelson, arguing against an industry review, makes the right noises. And there are concrete, specific commitments. Enterprise offers to support the BII's arbitration, rework machine take, drop restrictive covenants, and insist on a signed-off and independently assessed business plan before handing any licensee the keys. And it will put £100,000 or more into a beefed-up trade body.
Excellent stuff, and we applaud. But its other promises are less impressive. Rather than be told it offers to "expand existing levels of disclosure", Lord Mandelson and prospective licensees will be keen to know exactly what that means, particularly as the pubco links this pledge to whatever "minimum industry disclosures" are agreed across the trade — as yet, a complete unknown. Will it include comparables with other Enterprise pubs? Will it include barrelage and history of previous licensees? We just don't know. Similarly, reviewing its code of practice, altering its discount structure and upping its regional manager training may all indeed lead to a better deal for licensees. But until detail is delivered, it's impossible for anyone to say.
The other problem for Lord Mandelson is that he will want to be reassured that the pub industry as a whole changes, not just Enterprise or Punch, which have between them only half the tenanted sector's pubs. To be satisfied that pan-industry reform can be delivered by the trade, he will want to see the outcome of the talks at the ALMR-convened arbitration group. The commitments thrashed out there will weigh more heavily in his judgement than any individual company's offers. Enterprise's absence from that table cannot be helpful.
Mandelson will also want to know if these promised commitments can deliver help to existing tenants, not purely future tenants. It is, after all, the plight of many current licensees that led to the Bec conclusions. It would be a travesty of justice if reform did nothing to alleviate their position.
