Family brewers share the pain as well as the gain

By Bob Feal-Martinez

- Last updated on GMT

Related tags Leasehold estate Lease Pubco

Bob Feal-Martinez, licensee at the Carpenter’s Arms in Swindon
Bob Feal-Martinez, licensee at the Carpenter’s Arms in Swindon
In the end most of us won't be millionaires, but that doesn't mean the entire industry needs to change, writes Bob Feal-Martinez.

I am mindful to start this offering with the expression 'if my auntie had balls, she would be my uncle.' Why you may ask? For me it perhaps reflects the reality of the now, as opposed to continually harping back to 'what if's' with regard to the whole Pubco/Tenant relationship.

Having read Robert Sayles latest offering I have to say it does make one chuckle, not the least being his knack of stating the blindingly obvious in an amusing fashion, which probably gives light relief to some struggling lessees, who spend endless amounts of time it seems on the PMA forum.

Now as a former, one could say, prolific poster, I fully understand that such a forum can enhance ones day when under pressure, however it doesn't solve the problems, it won't provide solutions, it won't pay the bills and it certainly won't change your relationship with your Landlords, but it could damage it further.

Perhaps it is apposite to say at this point I do not claim to have the solution to the tie dilemma, and I suspect despite various self appointed groups saying the removal of the tie will be the panacea you all crave, no one who takes an objective view believes it.

It seems that we have an absolute immovable mountain with Fair Pint and their various allies believing that as well as the tie being removed, the FMR should not increase and in some cases decrease. The Pubco's and their backers will simply never agree to that.

For the Pubco's it really is just a numbers game, they have a huge debt to service, remove the 'wet' rent and the 'dry' rent will have to increase to compensate. For them it simply cannot be any other way.

As for the tenant lessee the reality is that signing a lease which is draconian in its nature and has been so for 20 years does rather beg the question which is frequently asked, even now. Why?

Of course it is human nature to believe one can do better than the last tenant, but the past 10 years has shown that few tenant/lessees make a life changing living, and with the demise of the whole on trade sector the much vaunted 'assignment' premiums are getting smaller and smaller, dilapidations getting bigger and bigger, and defaults growing.

It is a vicious circle that will not be stopped by the removal of the tie for the reasons I have explained, ironically it may actually increase the inflow of new 'lambs'.

Being a tied tenant of family brewer Arkells, and formerly with Inntrepreneur/Unique I have seen both models at work. There is no doubt in my mind which is the best option of the two.

Most family brewers share the pain as well as the gain. The interview in the PMA with James Arkell recently was an accurate reflection of how the company operates.

I for one would not like to see the one size fits all solution of removing the tie, this would indeed alter the relationship and balance that had sustained traditional tenancies for a very long time.

The Lessee/Pubco war will only be won when there are no longer 'lambs' to the slaughter, that really doesn't appear to be happening yet despite a seven year onslaught against the Pubco's in the media and in Parliament. Not to mention many previous years with people like me actively decrying the model. Yes the Government could regulate, but would that help, doubtful.

We have seen in the end the legal process can work, if as expected the Karen Murphy case opens are the free market, something I always contended it would, there really is a need for a strong court challenge where the whole partnership relationship is aired. There is much more awareness now by the courts and with proper direction lessees could receive a fair deal.

Purile attacks of Pubco CEO's will ultimately achieve nothing, calm, objective evaluation and a strong evidence base will.

What advice would I have for those thinking of taking a lease at this time, think long and hard, do the numbers, if they don't work now, will they work in the future. In today's market that would be doubtful.

For those already with a lease do not forget there are lots of ways to reduce your overheads, focusing on just one or two elements will mean you probably lose sight of savings that could put ten or twenty percent on your bottom line, and could just stop your bankruptcy.

The PMA frequently runs articles on gas, electric, telephone bills etc, but people still fall foul to them. Why? These are very simple things to control, but you can't do it by spending your life on a forum or the social side of your bar. A Pub is a business like any other, as Gary Player or was it Arnold Palmer once said, 'You drive for show, you put for dough '. Pubs are no different - taking a million pounds a year is not a lot of good if you are left with fifty pence.

In the end most of us won't be millionaires, but that doesn't mean the entire industry needs to change, let's hope the Government understand that. The last thing I need in a happy tenancy is for the woes, how ever real, of the unhappy lessees, to force changes in my sector and I'm sure I speak for many traditional tenants.

Bob Feal-Martinez is licensee at the Carpenter's Arms in Swindon.

Related topics Beer

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