To 'buy' or 'sell' the pub sector

Another week, another set of conflicting assessments as to the economy's prospects. It seems that everywhere one looks these days there is an economic organisation ready to 'tell it how it is'.

Whoever you believe - the 'doomsayers' or the 'greenshooters' - things could improve in the next few months, helped perhaps by the World Cup and all it has to offer the nation's boozers. Well, English boozers at least.

Then again, people who are paid far more than I am to wax lyrical about these things reckon that 2010 might be alright but that we're heading for a fall from mid-2011 through into 2012, as tax rises and spending cuts introduced by whatever government wins the imminent general election hit home. So more economic pain to come then.

But hey, it's not all gloom and doom. The pub sector got a shot in the arm from a major City broker last week. Merrill Lynch's argument is that with a focus on upper-end pubs, pubco performance will improve.

And as the chief executive of a large brewer said to me last week, dealing with the underperforming chunks of one's estate, whether by getting rid or by implementing 'remedies' or a combination of the two, means you are tackling the situation. Whether 'underperforming' pubs, sold by the Big Boys, can be turned round by entrepreneurial types is a matter of opinion.

Merrill Lynch's upbeat assessment of the state of the industry didn't convince everybody however. Anti-pubco types argued there is more bad news on the horizon for at least one large pub operator. Others cheekily suggested it would have been 'bad form' for Merrills to sound negative after corralling the Great and the Good into its London offices to talk about the market.

Mischievous blighters, some of these analysts…