PUB TRADE AT THE MERCY OF THE ROBBER BARONS

The pub trade appears to be in crisis. Since 1980 17,000  pubs in the UK  have closed their doors. A combination of factors such as cheap supermarket booze, the smoking ban and the bitter economic climate are often blamed for the demise of local watering holes all over the country. This isn't the whole story. The pub trade isn't dying. It's being murdered.

The majority of pubs that have closed in recent years belong to the so-called "Pubcos". Enterprise Inns and Punch Taverns are two of the best known examples of a "Pubco". They operate pubs on a "tie" system. The pub company sells a lease on a pub to a tenant. The tenant then pays rent to the pub company for the pub itself and is also forced to buy their beer from the pub company. It is vital to understand at this point that the "Pubcos" don't actually make beer.  They buy beer on the open market and then sell it at inflated prices to their leaseholders.Some estimates suggest that pub companies are inflating the price of beer by up to 45% . Despite the fact that they pay rent, the publican is also responsible for repairs to the property. If the roof caves in, it's down to the publican not the pub company who own the building.  It's a bit like paying rent on a flat , being forced to buy your groceries from your  landlord and then having foot the bill when the ceiling caves in. According to the Government this is all perfectly legal....

As if that's not bad enough, when a leaseholder  decides that they're fed up with lining the pockets of their feudal overlords and decide to throw  in the towel they're hit with the draconioan "delaps" clause.  Just to insure that they've squeezed every last penny out of their impoverished leaseholders, some "Pubcos" insist that the property is restored to the condition it was in at the start of the lease.

  Let;s briefly look at the numbers. The rent on a recently closed Bristol pub owned by Enterpise Inns was £38,000 per year. The former landlord estimated that he paid  £200- 300,000 per year to Enterprise Inns in addition to his rent. In his last quarter of trading he made a profit of £700.  The Guardian recently estimated that tax losses to the Treasury are £5.5 million per week as result of pub closures.

The Government recently refused to introduce legal changes to the system that the pub companies operate. They did make some minor concessions such as allowing independent arbitration on rent increases.The Governments response to the Select Committee report on the pub trade was greeted with dismay by the Campaign for Real Ale.  Brian Binley MP was quoted as saying that the Government had "sold out to the devil," on the question of publicans rights.

Under the circumstances you'd expect the the pub companies would be making a fortune. It you want to find an example of how to run a business into the ground with a combination of greed and crass incompetence then you need look no further than Enterprise Inns. If you doubt my word, then type the words "Enterprise Inns" followed by a swear word of your choice into Google and look at the results. It you're not familiar with bad language may I suggest "Enterprise Inns cunts" as a good starting point.  Enterprise Inns borrowed huge sums of money on the bond markets and used it to buy vast numbers of UK pubs. In 2007 Enterprise Inns stock was over £7 a share. It's now worth 28 pence a share. The company has net debt of over £3 billion pounds. Ted Tuppen the CEO of Enterprise Inns makes some smooth noises about helping publicans who are struggling in tough times.  However the suspicion persists that Enterprise Inns are more interested in running pubs into the ground so they can apply for change of use planning consent and convert the property into houses or flats.

The dynamic duo of Cameron and Osboure have made plently of noise regarding their support for small buisness. When it come down to it they're really much happier protecting spivs such as Ted Tuppen. The high debt speculation model that Enterprise Inns was founded on has a distinct Thatcherite ring to it. This is probably why the toxic tories are happy to support the current feudal status quo.