Business Debtline accuses pubcos and breweries of lack of flexibility over rent payments

08-Oct-2012 - Last updated on 12-Mar-2017 at 02:37 GMT

A debt advisory service that is receiving an increasing number of calls from tied tenants has said pub companies and breweries are not offering enough flexibility in rent payments.

Advisors at Business Debtline have taken at least one phone call a day from a publican for the past 12 months — they used to take one call every two days. The charity has 20 advisors.

Nicola Connop, team manager at Business Debtline, put this down to the beer tie. She said: “People are falling behind in payments for rent, business rates, paying for beer and VAT. We’re finding that if a client falls behind with rent or beer payments, there’s a lack of flexibility on the brewery’s side. There’s a lot of pressure on people.”

She also noted a large number of licensees in personal debt because they have used their own credit cards to help the business.

“There is a burden to put their money in, trying to get the business going with personal debt,” said Connop.

She added the economic climate, cheap supermarket alcohol and the poor weather over the summer have not helped footfall.

Even though pubs are branching out to food, they are still short of footfall, Connop said.

She advised licensees to get advice sooner rather than later, and make up a business budget sheet that lists all the pub’s income and expenditure. This should also list how hosts plan to increase trade and make up missing payments. That way, a pub company or brewery is more likely to negotiate a deal.

Connop said: “The earlier you take advice the more options you have available. Your starting point is a business budget sheet.

“If you have any arrears, you need to prioritise paying the debts that could mean you lose something. So rent and beer payments are important because you could lose your business.”