Tenants could cut utility costs

Both Enterprise and Marston's suggest tenants need to join buying groups to ensure they get the cheapest energy costs.

The two tenanted operators suggest that forming buying groups is the best way to mitigate the large utility cost increases that tenants have seen in the past 12 months. But both companies have found tenants reluctant to join the buying groups they have tried to organise to secure better energy deals.

Only a few hundred Enterprise licensees took part in a bulk-buy scheme with Scottish Power organised by the pubco in 2006. It collapsed after around two years due to the low uptake. Participating licensees saw savings of around 20% to 25% on prices at that time.

"The licensees couldn't have got a better deal if they tried," said Enterprise head of property Russell Burton. "The apathy was unbelievable."

Enterprise chief operating officer Simon Townsend said: "We will continue trying to secure group purchasing deals. We are having conversations with utility companies all the time to secure that."

Marston's Pub Company managing director Alistair Darby said: "The biggest problem for tenants is that they are loathe to commit themselves to a buying group that would create buying power.

"It's been frustrating for pubcos when they've attempted to create a buying group because the vast majority of tenants are unwilling to commit to it as they thought there was a catch — and unfortunately there's no evidence of tenants being able to create a buying group independently."

Darby said Marston's was unwilling to leverage its managed division discounts into tenanted pubs because the company would have to take responsibility for payment of their bills.

A tenanted division buying group would need an independent critical mass of around 750 licensees committing themselves.

Darby and Townsend both believe the worst of the utility increases were seen last year. But Darby said some licensees may not be pressure-testing the market hard enough, be on the wrong tariff, or in some cases seeing energy providers factoring wider market risks into costs and charges.

Utility bills show big increases​

Nearly one in three licensees (29.2%) has seen their electricity bill rise by more than 40% in the past year, according to a snap survey on morningadvertiser.co.uk.

And 21.3% saw gas bills increase by the same proportion.

Almost a third (31.8%) pay £11,000 to £15,000 for utilities overall, with 18.2% paying between £16,000 and £20,000, and 10.6% forking out £21,000 to £25,000.

A large minority — 10.6% — pay between £26,000 and £35,000.

More than one fifth — 21% — pay more in utilities than rent.

Exactly one in three said they'd switched supplier in the past year, and 80.6% have a smart meter installed.

Despite the huge increases, Enterprise's Russell Burton said in general that prices had "stabilised" in the past 12 months.