Over two years ago I wrote about the destruction inflicted on the great British pub by what are known as “Pubcos”, the two largest in the UK being Punch Taverns and Enterprise Inns – see The Pub and the £3 Pint.
Both names will be instantly recognisable from countless “To Let” boards adorning pubs up and down the country. They offer “exciting opportunities” to run your own pub and turn yourself into a bankrupt in an instant.
Since then I’ve followed the woes of the largest operator – Punch – against a background of increasing Parliamentary campaigns to get a fairer deal for tenants and a public tired of losing valuable community assets because of simple greed and sheer financial recklessness.
There was an excellent article in The Sun of all papers last week which, although largely cobbling together previously known information, presented a powerful summary of the impact of the Pubcos on the pub trade to date against the background of a possible collapse of Punch.
The Pubcos were businesses founded to acquire thousands of pubs that the previous owners, the brewers, were force by Government to shed.
The rationale here was that the brewers enjoyed a monopoly position and this was damaging to the industry proving conclusively that Governments should stay out of business.
In short, this policy led us to where we are now with a trade wrecked beyond comprehension.
Founded on debt and expanded on more debt, these companies worked on the simple principle that property values would never do anything other than rise. It was that simple and it was that stupid.
Very intelligent people from bankers to city analysts backed this model and at one point Punch had an estate numbering in excess of 10,000 according to Simon English, City Editor of The Sun and a debt mountain in excess of £4bn.
“Giles Thorley, the chief-banker-turned publican…was paid about £30m while the shares boomed to nearly £14 each. Today they are worth 9p.”
Having disposed of thousands of pubs largely by asset sales, demolitions and conversions into various new uses, Punch now has around 4,000 and still owes an eye-popping £2.3bn to its lenders.
It is now on the edge of collapse although those who made fortunes at the beginning are long gone. If the proposed deal to restructure the current debt is approved via a debt for equity swap, expect more pain at the bar.
Here are some facts from the article:
– In 1980 there were 69,000 pubs in the UK, today around 48,000 with 31 a week still closing and 2 of these becoming supermarkets!
– 60% of tied publicans earn less than £10,000 per annum…work the hourly rate out there if you can?
One of the more odious and repressive policies enforced by the Pubcos is the beer tie forcing tenants, already paying non-negotiable rents, to buy stock only from the Pubco and often at prices way above market value.
The combination of sky-high rents and the beer tie, in a nutshell, is why a pint costs so much today.
You and I are paying for the stupidity and greed of a very small number of city whizz-kids who slaughtered the industry for personal gain and were allowed to do so by dopey bankers and weak legislators.
Successive Governments have been useless, almost disinterested, even joining in the carnage via punitive taxation to further milk the industry.
They have also ignored the health lobby’s credible campaign for a minimum unit price of alcohol which would not have impacted the pub trade but the supermarkets instead and gone some way to counter the increasing cost of alcohol abuse to the NHS and society in general.
Cameron typically bottled it last year and we now have the supreme irony of two pubs a week converting to supermarkets so more cheap alcohol can flood onto the streets; it is utter madness.
The demise of the pub has little to do with the smoking ban – that is a massive red herring. Pubs have closed in their thousands because drinking in pubs has become too expensive for many.
In direct contrast you can still get wasted – home alone – for a fiver via the supermarket. As the Government whimpers…”please drink responsibly” they have sold a great trade employing thousands down the river as a populace gets wankered behind closed doors.
The deal proposed to restructure Punch will be voted on in September and if it succeeds – as it most likely will – two US hedge funds will become the largest shareholders.
Cheers!
Bradford – A Galloway Free Zone
Not long left for us all to suffer the insufferable as surely even the voters of Bradford West will not be kidded twice by re-electing old mad eyes – George Galloway – as their MP.
Recently he called for Bradford to be an “Israel free zone” in response to the ongoing atrocities doled out daily between Hamas and Israel.
Scratching my head I wondered where the connection was.
Bradford is free of many things – good shops, decent entertainment venues, skilled jobs – but where does Israel come into it? Not sure I could locate my Israeli takeaway in the village.
I consider myself reasonably intelligent but I have scant knowledge of the Middle East. What I do not need is a self-publicising opportunist like Galloway dragging my home town into this mess to court votes to save his own skin.
Of course the media interviewed the Leader of the Council – rather hopefully – wheeling him out of his bunker for his thoughts.
As he mumbled away with his usual incoherency you sensed this was a programme filler at best and hoped someone would guide him back for his afternoon nap.
All conflicts inflict the worst carnage on innocents not politicians. We never ever get two sides of a story explained to us with balance and minus any agendas.
We have enough problems in Bradford – not that Galloway has done much to influence these in his tenure – for our elected MPs to focus on things closer to home.
Dear Facebook
Somehow I have over 400 “friends” although I am not sure I know 400 people; this is definitely my fault for not being more selective along the way.
However, on occasion I get a new request and the available options for responding are a touch limited with only “Confirm” and “Not Now“.
I was approached by someone who most likely knows I would run over him with a bus if I ever saw him lying in the middle of a road. So “Not Now” just did not seem enough; could you please offer a third option of “**** Off Moron“?
Thank you ever so much and have a nice day there, I feel much better now.
Fat Lads Don’t Get It
Sat at the gym bar the other day I was enjoying a coffee as the day kicked into life {You told me it was gone 11…Ed}.
A young lad came up, fresh from the showers and looking flushed from his activity – or most likely the warm water – and ordered a hot chocolate to go.
Likely calories lost from modest exercise whilst juggling iPhone – 100. Injection from hot chocolate – 300.
Go fatty go!
School Time!
Come on you lazy lot it’s time to get back to school – not you kids, all you teachers! Soon the streets will be safe to walk again, free of the “yoof” hauled back to prison, sorry school.
Dew filled mornings, crisp autumnal air, freshly pressed uniforms and terrified teachers up and down the country.
Enjoy!
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