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) 😀
