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Licensees say pub will be ‘wiped out’ if rent deferred

By Emily Hawkins contact

- Last updated on GMT

Rule Britannia: Mandy and Andrew Powney believe many pubs will close for good if rents are not written off
Rule Britannia: Mandy and Andrew Powney believe many pubs will close for good if rents are not written off

Related tags: Coronavirus

Two licensees have said they believe rent should be cancelled for the period pubs are closed and, without this move, they will be in too much debt to reopen.

Mandy and Andrew Powney operate the Britannia Inn in Telford, Shropshire, and said they would like to see more support from their brewery Marston’s. 

They want to see rent cancelled for the time the pub has been closed.

The operators are due to receive the £25,000 grant from the Government but say it is still not enough to cover a £6,000 rent debt accrued over a 12-week closure period when other costs are factored in. They also think pubs will be closed for much longer than 12 weeks and are worried about the costs of out-of-date stock. 

Mandy said: “We have worked out roughly what it is all going to cost, and it is just going to wipe us out.”

The couple work about 60 hours each in a standard week, like many in the trade, and said they struggle to meet overheads during an average trading period.

Andrew added: “It’s hard trying to make ends meet on a normal day-to-day operation because you have got high bills such as Sky and BT, rent, a beer bill and nine staff to pay.

“Then, all of a sudden, that is taken away from us, unfortunately, in very unprecedented and obviously strange times for everybody.”

The couple said because rent is based on turnover of beer – and the pub was selling zero barrels – there should be no rent costs.

This sentiment is one shared by many tenants of pub companies, such as Ei Group and Punch, that have said they will defer rent payments for this period rather than cancel them. 

Anxious time

Mandy said she had felt ignored by early emails from the brewery, by its directions to the Government website for financial support, and its communications that it would look at pubs on a case-by-case basis at a later date.

She said: “They ought to speed up their response like other breweries. Everyone is so anxious. For licensees, it’s their livelihood and their homes.

“We want to be on their side and we want to carry on running a good pub and carry on as normal. But all those licensees won’t be there. They are going to fall along the way as the money runs out.”

In response, Marston’s said it would consider each pub on an individual basis and wanted to work with its licensees to help them weather the crisis.

A spokesperson said: “We have been consistent in our messages: we have suspended rent and are not charging it until we have had face-to-face meetings with each one of our tenants, and this has been communicated by email several times. Every pub is different and each tenant’s circumstances are too. We will work with each one, depending on their individual situations. 

The brewery said there was a “significant amount” of Government support to help operators with fixed costs and some businesses may also benefit from loan schemes.

The spokesperson added: “We have kept open communication with our tenants but, unfortunately, no one knows how long this process will last and we understand that is difficult for anyone running a business, but we should not commit to something that cannot be carried through. 

Day-by-day

"We want to work with our licensees to help them through this and to come back as the best pub they can be. However, it is important to recognise this is a global pandemic, a problem affecting everyone and everything we do, one in which we are all navigating on a day-by-day basis. 

“As soon as we can understand what timing looks like for removal of the lockdown, as advised by the Government, we will be developing reopening plans with the pubs.  

“Unfortunately, until the Government lockdown is lifted, we cannot have face-to-face meetings and while we appreciate this is frustrating, we believe this is the best course of action for us and our tenants. We are focused on supporting our tenants to reopen their businesses as quickly as possible and to re-engage with the communities they serve.”

Related topics: Property law

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