Ei Group 'penalising me for being a good operator', says licensee

By Emily Hawkins contact

- Last updated on GMT

Draining experience: one licensee has said she feels penalised and exhausted after negotiations to go free-of-tie
Draining experience: one licensee has said she feels penalised and exhausted after negotiations to go free-of-tie

Related tags: ei, Mro

One tenant has spoken out about a “draining” two-year experience negotiating a free-of-tie rent figure with Ei Group and describes feeling penalised by the process.

Jeanne Mason, licensee at the Red Lion, Litton, said she felt the pubco was dragging out the rent arbitration process to delay her going free-of-tie.

The Derbyshire licensee began the process for a market-rent-only (MRO) option in January 2017 and said the experience was wearing.

During the two year negotiation, Mason has used an independent assessor to renegotiate the pubco’s figures and travelled to meetings she felt were fruitless.

Lack of trust

The MRO figure determined by the independent assessor was £20,000 less than Ei’s figure, which Mason discovered via a process that cost her £2,000.

She added: “They don't want me to go free-of-tie and are taking as long as they can to prevent that happening.

“I just don't trust them and they are doing everything in their power to drag it out because while they drag it out, I am on a tied rent which I have to pay.

“We've also got to settle a tied rent figure even though I am definitely not staying tied, so they have come in at a higher rent than I am on now, which is not so far away from what I am going to be on as a free-of-tie,” she said.

The Red Lion is a country inn in Derbyshire
The Red Lion is a country inn in Derbyshire

She will seek further independent assessment on what the tied rent should be - again at a cost of £2,000 - and hopes this will mean the process moves forward.

Mason added: “I want to make a reasonable living instead of giving it all to Enterprise Inns, which is how I feel at the end of the month.”

The licensee described herself as “an above average operator” who worked 90 hours a week.

“I run an extremely tight ship and I wouldn't work this hard and not have a profitable business and they are penalising me for being a good operator,” she said.

Pubs code

The operator’s experience has been proof to her that the pubs’ code has failed publicans, she maintained.

Mason said: “It is not fair, it is not working. There is so many stipulations with it, you have to meet timescales and if you are just out then it fails.

“They have made it incredibly difficult for pubs to go free of tie and obviously the pubcos don't want us to, as they stand to lose so much money.”

A spokesperson for the pubco said: “Ei Group is built on the strength and sustainability of our pubs and we work closely with publicans to support their success, whether under the leased, tenanted, free-of-tie, or managed model.

“The pubs code is designed to offer publicans greater choice and transparency and we have worked hard to ensure our publicans are aware of all the options available to them and have the information they need to request and consider an MRO proposal.

“Our free-of-tie estate has grown to more than 400 pubs over the past three years, demonstrating our willingness to negotiate free-of-tie terms on a mutually agreed basis.”

A review into the pubs code is expected to take place this year, though details of its format are yet to be announced.

Related topics: Property law, Ei Group

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