[Closed] Pub vote

Its brilliant news. The breweries have been royally screwing pub landlords for years.Mainly trying to recoup money from their own disastrous over-expansion, and property speculating

We've had a succession of landlords in our local. The breweries charge them exhorbitant prices for pretty much everything, but particularly for beer. The landlord was telling me that if you walk into Weatherspoons, and look at the prices they're selling they're beer for, he can't actually buy it off the brewery at that price! Ridiculous! Its actually impossible to make a profit, unless you're doing food as well, or selling gallons of the stuff

If they hadn't changed the law, there wouldn't be any pubs left!

Or just horribly generic brewery chains.

I think the people it will really screw are the pubcos who had made a lucrative trade out of repeatedly getting in licencees etc and bleeding them of their retirement lump sums by jacking up the rent and beer prices after a year or so.

If it means I can get a pint of Bathams in Birmingham ( it's brewed in the Black Country and only available in 1 pub in Brum ) then I will be more than happy, heard rumours the Lords will try and scupper it though 🙁

ninfan - spot on. If you do turn a failing pub around, get regulars in, and have it busy every night, the brewery then hike the rents to exorbitant, unaffordable levels. They always win, as there seems to be a constant supply of people who think it'll be good to run a pub, only to then get absolutely shafted!!!

No surprise to hear the government are on the side of the Pubco's that are presently ****ing people over

I far prefer small independent non tied pubs so this is good news on balance IF it means more pubs are landlord owned and run which work and thus stay open. Where I have a concern is that it will undoubtedly lead to reduced profits at the larger pub owning companies and it's not as though they are making much money at present, pubs are closing at a rapid rate. The big danger is this leads to far fewer pubs, the owners will close them down and apply for change of use to residential.

Where I have a concern is that it will undoubtedly lead to reduced profits at the larger pub owning companies and it's not as though they are making much money at present, pubs are closing at a rapid rate.

The reality is this benefits [i]everyone[/i] except the pubcos, who (as has been mentioned) have been ripping the arse out of it for years. Couldn't give a toss if they do all go out of business anyway, people still want a drink and the vacuum would be filled with independent pubs & smaller breweries which as you rightly say are better & make/sell a nicer pint.

zilog +1

The Pubcos should look on the bright side - now every pub in the land is a potential client for their beer, not just to ones tied to them!

Anything that stops all the pubs closing is a good thing!! 🙂

The Pubcos should look on the bright side - now every pub in the land is a potential client for their beer, not just to ones tied to them!

The Pubcos should look on the bright side - now every pub in the land is a potential client for their beer, not just to ones tied to them!

They are only potential clients if you can distribute your product to them in a cost-effective manner.

I hope that the vote today will allow fair competition in purchasing for tenants and allow a greater diversity of beers in many a pub. I fear that the result might instead be that pub Companies will do away with tenancies and have only managed outlets so that they can extract the greatest amount of money from punters, leading to less choice and increased blandness of venues.

there is a simple solution to all this - vote with your feet - surely there are some pubs in local ownership near you

That is bollocks, pubcos make plenty of money. The reason pubs are closing is because it's impossible for landlords to run them and make money.

I fear that the result might instead be that pub Companies will do away with tenancies and have only managed outlets so that they can extract the greatest amount of money from punters, leading to less choice and increased blandness of venues.

In contrast, where I am in Canterbury (which is in the south-east and relatively affluent and has plenty of student/tourist money) over the last few years we've had a real beer renaissance - I guess partly driven by frustration with pubcos - of independent pubs & breweries. There has never been greater choice or better beer. Hopefully this will spread to the rest of the country now!

@zilog this doesn't make sense. Why if the pub-co's where making tons of money would they let pubs go out of businesses ? They certainly wouldn't force them out of business by charging high rents as once the pub is shut their revenue drops to zero

Because they focus their efforts on the profitable pubs and don't give shit about the less profitable ones even though they might be very important to e.g. a rural community

All the pub-co's stocks are down a lot today, Punch Tavern is at 50% of their market value of a year ago. Spirit's down 15% but higher than a year ago.

I do think the consequences of this move could be unintended ones. I forsee far fewer pubs and in fact an acceleration of the closures.

The Pubcos should look on the bright side - now every pub in the land is a potential client for their beer, not just to ones tied to them!

One but he's not opened it yet. He has had a top beer expert recommending him beers so it should be good when it does.

Ok there's another but the Landlord is a bit odd.

It's not quite the great news that I first thought, as pub chains of under 500 pubs appear to be excluded which means no change at my local.

I forsee far fewer pubs and in fact an acceleration of the closures.

It's not quite the great news that I first thought, as pub chains of under 500 pubs appear to be excluded which means no change at my local.

I see a lot of new sister companies startering up then. 🙁

I'm going to ask the landlord in my watering hole about this on Friday, see what his take is. The pub was bought up by Enterprise Inns, after it suddenly closed because the previous owner just couldn't be arsed about keeping the place together, in fact it was only because of Lauren the barmaid doing her damnedest to get beer into the place that it ran as long as it did.
It reopened after nearly a year, with a temporary landlord, then Mark took over early this year. He's done a fantastic job with the place, along with his wife, putting together great menus, etc., but it his enthusiasm for good beer that's made a big difference. During the summer he ditched one of the two fixed beers, (Doom Bar), leaving Courage Best for the die-hard locals who drink it, and started bringing in regional and national brews, changing them every couple of weeks or so.
He's passed some sort of certification and has access to another 140 brewers so it makes things much more interesting. If he can get business up enough, he may be able to have four pumps on next year. He's got CAMRA behind him too, so things are looking good.
It won't hurt that the pub will feature under its real name in a detective comedy-drama on Sky 1 over Christmas adapted from a series of books, so that might attract visitors.
Anything that lets him have access to a wide range of beers for a reasonable price can only be a Good Thing, but I'll see what he says when I get the beers in Friday. I think he's got Otter on this week, he says the reps from Otter and Bath Ales keep badgering him about putting their beers on. 😀

we sell a firkin ( 9 gallons) for around 60-70 quid depending on strength. enterprise, punch, amber taverns and to a lesser extent spirit owned pubs can order our beer through the SIBA dds scheme, they can't order direct from us. the pub co's mentioned above then double the price to their tenants, then we deliver it. so the landlord gets in touch with us, we generate the invoice and deliver it, the pub co does nothing....not a thing. not even advertising beers available. one of our regular customers complained to us recently after enterprise told him the reason the price of a firkin had gone up was that the breweries had put their price up... porkies... theives, the lot of them. the sooner they all go out of business the better, sell the pubs back to people who can have a real go at it

you say vote with your feet and yeah thats what happens.

between 2 locals, 1 is independent the other Green King.
one has more choice of ale, more often supports the full range of local breweries and the lowest priced pint of ale anywhere aside of going to the Weatherspoons in town, local chef who is very particular about the provenance of his food, landlord/landlady who work rest and play with the locals.
the independent one however is owned by someone who made their millions in hedge funds and retired with your money in his thirties, he employs a below average manager who wouldnt know an IPA from Becks, on the lowest pay he can get away with.

which one would you support

I fear that there will be unintended consequences, the original abolition of the tie for big brewers in the mid 90s achieved very few of its intended objectives and caused lots of pubs to go to the wall (even the MMC recognised mistakes were made). I hope this does better.

as pub chains of under 500 pubs appear to be excluded which means no change at my local.

Hmm. Got to remember that the primary focus of the pubcos isn't the leisure / beer trade - they're property businesses. Unintended consequence of this might be more pubs closed and redeveloped into flats when that's a more profitable option than keeping them as pubs.

edlong makes an excellent point.
Frankly, I'm fed-up propping up the British pub industry by myself, so I'm hoping CAMRA continues campaigning and attracting new drinkers to take the strain. 🙂

edit: just seen edlong's post, which mine was effectively a copy of!

Badnewz - I'm doing my best too comrade

Its a thankless task! 😥

Got to remember that the primary focus of the pubcos isn't the leisure / beer trade - they're property businesses.

Haven't they developed a cozy relationship with Tescos at the moment? They're turning the closed pubs into Tesco Express stores, as they don't need to apply for planning permission as, as far as planning law is concerned, it isn't a change of use? Thus handily getting around any local objections?

I'd imagine thats quite a lucrative business

I thought one of the other reasons pubs were going out of business was because of the taxes they pay on a poured pint, encouraging the practise of buying beer at a supermarket and drinking at home. Reducing this may also reduce the amount of pubs going out of business.

as pub chains of under 500 pubs appear to be excluded which means no change at my local.

That's shit.

There will be simply a lot of new chains with 499 pubs.

500 pubs seems like a huge business to me.

I'm amazed that [url= http://www.mirror.co.uk/news/uk-news/budget-2014-price-beer-cut-3259976 ]Gideons bold and inspired move[/url] didn't have everyone running down to the pub.

He gets no thanks for anything, does he?

500 pubs seems like a huge business to me.

However they are confined to a small part of the country, still family owned and "only" own 360 pubs so despite having a huge (negative IMO) influence over pubs/beer locally they will be unaffected. Weak.

@Pieface, classic recessionary behaviour is to drink at home (watch tv/movie) rather than go out, add this onto the fact that less people are drinking in pubs anyway and the business is under a lot of pressure. Its all about food now, you can't make enough money on a pint or two. If we go to the pub and have a drink we spend £10-£20, if we eat we spent £50-£75 (couple).

I think this measure is a typical fudged compromise which isn't going to suit anyone

Its all about food now, you can't make enough money on a pint or two.

Going off on a bit of a tangent.... Would the difference in proposed regulation between the big boys, and the not-so-big boys (499 is still a lot of pubs) be legal under EU competition law?

Surely it should apply to everyone, or not at all?

Just done a bit of research on this.

In theory this should affect about 23,000 of the 35,000 tied and brewery run pubs in the UK.

Considering that just over 15,000 of those pubs are owned by just 2 operators I am sure we can expect a lot of dirty dealing going on.

For Clarity 'pubcos' are not breweries usually. Enterprise, punch, and admiral taverns don't make a single pint-never have.

They are vulture property companies, inserting an unnecessary middleman between brewers and the pub retailers.

Well certainly the best pubs in my neck of the woods are independents, with a number of new ones springing up. There is one local brewery with a whole 3 pubs in its chain - they're good too and the beer is always spot on.

Take the best known large brewery around these parts and many of their pubs are dismal, often beer of dubious quality and they have been known to be shafting their tenants.

They are vulture property companies, inserting an unnecessary middleman between brewers and the pub retailers.

Jambalaya-any evidence for that?

When they did the bulk of the buying (the 90's) pub prices were skyrocketing and they had no problems raising billions in finance from the banks. Pub prices only collapsed from 2005 onwards really, and they already had their estates by then. They were the not the 'only' buyers, they just were the ones prepared to overpay, and mostly bought smaller (sub 500) pub estates-something individuals could never do.

They where the only buyers of the pubs when the brewers/original owners where desperate to get rid of them having taken the view that the pub business was in serious decline

The Beer Order had a massive effect on the attractiveness of a pub estate to the big 6 at the time - and forced them to sell pubs - not only do none of them own a pub estate anymore - by 2000 I think only one one of them had stayed in the beer business.

I put on the second post of this thread:

[i]The breweries have been royally screwing pub landlords for years.Mainly trying to recoup money from their own disastrous over-expansion, and property speculating[/i]

They got themselves into this position with their limitless greed and hubris in the boom years, and now they're expecting their tenets and customers to pick up the tab for their bad management

Ironic echoes of the Banking Industry really. Who happily financed the whole adventure. Actually... it seems to be the way for a lot of industries nowadays. Especially ones that are little more than thinly disguised cartels

@thepublican I work in finance, I've been involved / aware of these pub-cos since they where set up. They built up these portfolios by buying the pubs at the market prices from willing sellers. People are right to point out about the property element, that's a key part of the analysis (change of use) as without it the pubs would be worth a lot lot less.

All true Binners.

Headlines are misleading too. Although we did need a few less pubs, most pubs are profitable if you remove the pubco slice. For example last year I paid £37k rent and around £50k wet rent (the amount they inflate your trade beer prices by) out of £225k turnover. Profit for me was nil. The pub is worth around £500k freehold.

Mortgaged as a freehold I'd pay around £25k per annum I reckon. So freehold with no tie the pub is profitable to the tune of £62k.

Pubs are not necessarily 'failing', they often have an underlying profitability that the pubco locusts are paying their shareholders.

They built up these portfolios by buying the pubs at the market prices from willing sellers.

The whole market was massively influenced by changing regulations and political influence throughout the 1990s, it wasn't a free market and the brewers were not always willing sellers.

So you're partly to blame eh Jambalaya? 🙂 no wonder you like defending them!

Truth is they overpaid, and when things soured they expected the tenants to take the hit from their slice rather than the pubcos from their portion. Would shareholders have allowed them any other option though? Still a morality-free lot though...

@Pieface, classic recessionary behaviour is to drink at home (watch tv/movie) rather than go out, add this onto the fact that less people are drinking in pubs anyway and the business is under a lot of pressure. Its all about food now, you can't make enough money on a pint or two. If we go to the pub and have a drink we spend £10-£20, if we eat we spent £50-£75 (couple).

What has this got to do with the OP?

Pubs are not necessarily 'failing', they often have an underlying profitability that the pubco locusts are paying their shareholders.

Most of the money goes to bondholders, rather than shareholders, they are highly leveraged. Jambalaya probably bought some bonds so thinks he understands the industry.

Pubs are not necessarily 'failing', they often have an underlying profitability that the pubco locusts are paying their [s]shareholders[/s] creditors.

FTFY - Portfolios built largely on debt, rather than equity is my understanding. Same difference from the pub end of the transactions, maybe, but perhaps a reason (not a justification) for continuing to shaft the publicans - creditors care about getting paid what they're owed, shareholders (in theory at least) have a greater interest in the long term value of the business.

anyone else sick of paying over the odds to bail out some greedy cant who likes to play fast and loose with other peoples livelihoods?

off to the brewery tonight where im gonna stir the members night up to start the drunkard revolution.
or work on a hangover

Meanwhile, another new place is opening nearby. According to the website it will:
"offer a unique addition to the drinking and dining repertoire in South Manchester and Cheshire, and will combine innovative and contemporary design with the tradition of craft ale, artisan food and a commitment to excellence in service and hospitality".

Which to me sounds a bit of a full sleeve, no socks, trousers turned up, single-speed sort of place.

Anyone using the word Artisan, with regard to food or beer, should be publicly flogged naked through the streets, then force fed their own tweed flat cap

I'm lucky, I've got a proper brewery at the bottom of the road (not featuring innovative, contemporary design, or craft or artisan anything. Just good beer) 😀