The pubco, which has almost tripled in size since Heineken completed its deal to buy 1,900 Punch pubs, already offered JAT agreements to people who wanted to run a pub without the need for a huge capital investment.
But in an exclusive interview with The Morning Advertiser, Lawson Mountstevens, the pubco’s managing director, explained that JAT agreements had previously only been in place at five sites. “We were enthusiastic amateurs. We were experimenting with it and working with it,” he said.
The addition of a large number of pubs has forced the pubco to scale up its operations, and invest heavily in JAT as part of this expansion.
“We’ve invested massively in the electronic point of sale and Zonal systems, so we’ve got proper management financial controls. We’ve got a full health and safety agreement set up with a company called Shields, so everybody can be compliant and it makes that really easy,” he said. “And we’ve employed some food and retail experts… to make sure we get those retail offers right for the JAT pubs.”
Mountstevens explained that the move was partly prompted by the Heineken/Punch deal because more than 100 sites included in the acquisition were on legacy Falcon contracts. He said these contracts are “broadly” the same as JAT in the sense that the individuals running the pub are self-employed, they run a limited company, the pubco provides a retail turnkey operation and the site managers take a percentage of turnover.
Star has put on roadshows around the country to speak to people on Falcon contracts and explain the JAT scheme. “The next phase of that is in the next few months business development managers will be talking to those operators about transferring them across to JAT agreements and the individual terms that go with that by pub,” he explained.
Falcon contracts, originally introduced by Punch, have come in for criticism from campaigners who claim the contracts had left pub managers out of pocket “as a result of unexplained discrepancies from their cash reconciliation process and also deductions as a result of discrepancies from their stocktakes”.
However, Star’s investment in electronic point of sale (EPoS) and other back office systems aims to prevent any issues of this sort under the JAT scheme.
Watching with interest
While campaigners are not alleging Heineken or Star is responsible for any historical issues, they are likely to be watching the rollout of JAT with interest.
Mountstevens sends a positive message, saying: “We think JAT is a brilliant way of getting into running your own pub. You can come in with very little capital investment. We provide the entire retail offer, everything. Food, coffee, drinks, end to end, plus the ongoing drumbeat of retail marketing support.
“Your focus then, as a new operator, is absolutely on the operation of the pub and driving the sales through that line. So we think it is a really interesting and exciting way of getting different people and different talent into pubs.
“Actually if it all works, we know there is money to be made there. And the onus is on us to make sure we’re putting the right retail and support in place to make sure it works. It’s not in our interest for businesses to fail, it never has been and it never will be.”
- This is an extract from an interview with Lawson Mountstevens. Look out for the full interview with more on the Punch-Heineken deal and the future of Star coming in The Morning Advertiser soon.