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31-10-2013, 16:34
Visit the Pete Brown's Beer Blog site (http://petebrown.blogspot.com/2013/10/tackling-thorny-topic-of-pubco-tie-it.html)
Yesterday beer writers en masse were accused of ignoring 'the elephant in the room' (http://www.morningadvertiser.co.uk/Opinion/Robert-Sayles/Isn-t-it-time-beer-writers-took-their-heads-out-of-the-sand) - the issue of the PubCo tie.
There are three reasons I haven't really written about it very much before now:
I've been really, really busy, playing catch-up with my recent books since my laptop was nicked two years ago.
The anti-PubCo campaigners can be a bit spiky. When you've lost your job, your life savings and often your home, in circumstances that you feel are grossly unjust, you have every right to be angry. But it can be a bit like trying to deal with a lion with a wounded paw.
It's really bloody complicated. The issues very quickly gets into conversations about legal technicalities and contracts, which makes it hard to understand in the first place, and harder to then break down into short, focused, interesting articles.
I've now caught up on my work. The PubCo campaigners and I have reached a point where we can chat amicably over a beer. And they've patiently helped me understand the technicalities. So I'm now ready to jump in.
The impetus for doing so though, is that the whole issue just got personal.
Sometimes, businesses fail. Sometimes, publicans aren't cut out for the job. Sometimes, people don't understand what they're getting into. Being a publican is a tough job that requires a very broad set of skills, and I know that I would be a disaster if I ever attempted to run my own pub.
That's why the boss of Enterprise Inns, recently dismissed the campaign against the current PubCo model (http://www.morningadvertiser.co.uk/Opinion/My-Shout/Enterprise-Inns-CEO-Ted-Tuppen-s-speech-to-the-Tenanted-Pubco-Summit) as the work of "failed or failing publicans looking for someone to blame."
Literally these words are correct. But the clear implication of phrasing it like this is that they should in fact accept the blame themselves. The consistent rhetoric from the PubCos is that most tenants and lessees make a decent living, that they help those who are struggling, and that if they fail? Well, it's not our fault - they knew what they were getting into.
I'll be examining the ways in which this argument falls down in the face of reality a lot more closely, both here and elsewhere, over the coming weeks. And I will be asking the PubCos for their response to the points I raise. I don't want to rant about this issue - I want to present the truth about it.
But first, I want to focus on one pub close to me whose situation doesn't make any sense at all if Enterprise Inns is speaking the truth.
The Alma on Newington Green, North London (http://www.thealma-n1.co.uk/), is by any reckoning a great and successful pub. Well-heeled Islington residents consider it a gastropub - the food is excellent, way beyond typical pub fare, locally sourced and seasonal, the ever-changing menu determined by what's fresh and good. The home made sausage rolls on the bar for those who don't want a full meal are awesome.
The beer is well-kept, and there's a passion for cider - North London CAMRA recently named the Alma its Cider Pub of the Year, which it added to a list of other awards it has won. When I was in there on Tuesday night there was a choice of six draft ciders. The place was busy for a Tuesday night, but then it's always ticking over, and it's difficult to get a seat on the weekend.
The Alma is an old Victorian building, full of nooks and crannies, with everything from big, bright tables by the windows for spreading the papers out on at Sunday lunch, to shady sofas for intimate late night chats. The decor is stylishly shabby and doesn't try too hard.
The licensee, Kirsty Valentine, is a force of nature. She's an instinctive publican who realises that a great pub is about creating a great atmosphere. She's become a solid fixture in the community, and a major player in the local business association.
Newington Green is now gentrifying rapidly. This wasn't always the case. The Alma used to be a dive, like most other pubs in the area. When I first arrived in Stoke Newington most people wouldn't dream of drinking there - you'd get the bus down into Islington instead, where the pubs were crap chain concepts, but at least they cleaned their lines more than once a year and you didn't run the risk of getting glassed. When Kirsty arrived, the Alma was the first pub that raised the standard. It helped turn Newington Green into a destination, starting ripples that spread. One by one, the other pubs near the Alma have been done up too. Newington Green is now a great place for a pub crawl, with the Snooty Fox, the Dissenting Academy and the Edinburgh Cellars all offering great beer and great food. This is great news for the drinker, less good for Kirsty, who now faces increased competition. Her response? Last year she organised the Newington Green Olympic pub crawl, which saw pubs in the area working together to create a fun activity, benefiting all the pubs that took part, making the cake bigger rather than fighting over shares of it.
What I'm basically saying is, to any rational observer, the Alma looks about as different from the idea of a 'failed or failing pub' as you can possibly imagine.
So how could it possibly be failing?
How could Kirsty be facing losing the pub - and how could there be a possibility that the pub itself might not survive?
I have copies of a pile of correspondence between Kirsty and Enterprise Inns that's about three inches high. She's spent most of her time over the last three or four years fighting her PubCo, which claims it only wants to help, on all fronts.
The basic problem, as she sees it, is that the PubCo model effectively means paying rent twice - wet rent and dry rent. Dry rent is the straightforward rental she pays to the PubCo. Rents are reviewed regularly. They can go down as well as up, but if the profitability of the pub increases, the PubCo will do all they can to take most of it, essentially disincentivising the publican from improving the business the way Kirsty has.
On top of this, she pays a 'wet rent' by being compelled to buy all her beer through Enterprise, or face stiff penalties for buying 'out of tie'. This limits the range of beers available to her. But more than that, she's paying up to double the price of a cask or keg compared to if she were able to buy it from the brewer direct. This means she has to charge higher prices for a less interesting range of beers than her competitors.
This is the double bind of the PubCo tie that many licensees are complaining about. Enterprise's defence is twofold: firstly, they will offer help to anyone who is struggling. And second, the publican knew what they were getting into when they signed the deal, and Enterprise can't be held to account if new publicans had unrealistic ideas. I'm sure that in some cases this is true. But the number of cases where people give details about being misled, lied to and ripped off by their PubCos means that if it's not true, there are an awful lot of 'failed and failing' publicans coming up with remarkably consistent and detailed lies.
Kirsty's battle with Enterprise is happening on so many fronts, it's impossible to go into detail here and still expect you to read to the end. But in summary, the result of this fight is that Enterprise now want her out of the business she has built up, and will shortly be taking legal action in an attempt to make that happen.
Should Enterprise be victorious, apart from a brilliant publican facing financial ruin and losing her home, there are two possible consequences: one is that Enterprise stick in another tenant. The other is that they close the pub down, and sell it for redevelopment, with a change of use stipulation - a fairly common practice. It takes all of ten minutes to walk to the nearest Sainsburys from Newington Green. I'm sure they or Tesco would love to turn this beautiful old boozer into yet another supermarket.
The next battle Kirsty wants to fight is to ensure that, whatever happens to her personally, the Alma remains a pub - given that it's popular and the local community like it that way. To this end, yesterday she launched the 'Battle for the Alma' campaign. She is applying to Islington Council to have the pub declared an Asset of Community Value (ACV) under the recent Localism Act. This would prevent Enterprise from initiating a change of use from the property being a pub. This was the first step in a campaign that ultimately saved the Ivy House pub in South London (http://www.ivyhousenunhead.com/) from being redeveloped into flats when the local community were perfectly happy with it as a local pub - which is now doing great business.
If you know the Alma, if you have ever been there and enjoyed it and wish to see it saved, visit the Battle for the Alma (http://www.battleforthealma-n1.com/) website and sign the change.org petition (http://www.change.org/en-GB/organisations/alma_n1_supporters), giving Islington Council the stories and reasons why the Alma deserves to be saved (beyond the simple common sense reason that it is a thriving, successful, popular pub that by any sane reckoning should not be under threat.) It will make a real difference.
I'll be writing about the lies, bullying and neglect Kirsty has suffered in due course - and asking Enterprise to respond. But this first step is important and urgent - we have until next week. If you know and love the place, please give this campaign your support.
More... (http://petebrown.blogspot.com/2013/10/tackling-thorny-topic-of-pubco-tie-it.html)
Yesterday beer writers en masse were accused of ignoring 'the elephant in the room' (http://www.morningadvertiser.co.uk/Opinion/Robert-Sayles/Isn-t-it-time-beer-writers-took-their-heads-out-of-the-sand) - the issue of the PubCo tie.
There are three reasons I haven't really written about it very much before now:
I've been really, really busy, playing catch-up with my recent books since my laptop was nicked two years ago.
The anti-PubCo campaigners can be a bit spiky. When you've lost your job, your life savings and often your home, in circumstances that you feel are grossly unjust, you have every right to be angry. But it can be a bit like trying to deal with a lion with a wounded paw.
It's really bloody complicated. The issues very quickly gets into conversations about legal technicalities and contracts, which makes it hard to understand in the first place, and harder to then break down into short, focused, interesting articles.
I've now caught up on my work. The PubCo campaigners and I have reached a point where we can chat amicably over a beer. And they've patiently helped me understand the technicalities. So I'm now ready to jump in.
The impetus for doing so though, is that the whole issue just got personal.
Sometimes, businesses fail. Sometimes, publicans aren't cut out for the job. Sometimes, people don't understand what they're getting into. Being a publican is a tough job that requires a very broad set of skills, and I know that I would be a disaster if I ever attempted to run my own pub.
That's why the boss of Enterprise Inns, recently dismissed the campaign against the current PubCo model (http://www.morningadvertiser.co.uk/Opinion/My-Shout/Enterprise-Inns-CEO-Ted-Tuppen-s-speech-to-the-Tenanted-Pubco-Summit) as the work of "failed or failing publicans looking for someone to blame."
Literally these words are correct. But the clear implication of phrasing it like this is that they should in fact accept the blame themselves. The consistent rhetoric from the PubCos is that most tenants and lessees make a decent living, that they help those who are struggling, and that if they fail? Well, it's not our fault - they knew what they were getting into.
I'll be examining the ways in which this argument falls down in the face of reality a lot more closely, both here and elsewhere, over the coming weeks. And I will be asking the PubCos for their response to the points I raise. I don't want to rant about this issue - I want to present the truth about it.
But first, I want to focus on one pub close to me whose situation doesn't make any sense at all if Enterprise Inns is speaking the truth.
The Alma on Newington Green, North London (http://www.thealma-n1.co.uk/), is by any reckoning a great and successful pub. Well-heeled Islington residents consider it a gastropub - the food is excellent, way beyond typical pub fare, locally sourced and seasonal, the ever-changing menu determined by what's fresh and good. The home made sausage rolls on the bar for those who don't want a full meal are awesome.
The beer is well-kept, and there's a passion for cider - North London CAMRA recently named the Alma its Cider Pub of the Year, which it added to a list of other awards it has won. When I was in there on Tuesday night there was a choice of six draft ciders. The place was busy for a Tuesday night, but then it's always ticking over, and it's difficult to get a seat on the weekend.
The Alma is an old Victorian building, full of nooks and crannies, with everything from big, bright tables by the windows for spreading the papers out on at Sunday lunch, to shady sofas for intimate late night chats. The decor is stylishly shabby and doesn't try too hard.
The licensee, Kirsty Valentine, is a force of nature. She's an instinctive publican who realises that a great pub is about creating a great atmosphere. She's become a solid fixture in the community, and a major player in the local business association.
Newington Green is now gentrifying rapidly. This wasn't always the case. The Alma used to be a dive, like most other pubs in the area. When I first arrived in Stoke Newington most people wouldn't dream of drinking there - you'd get the bus down into Islington instead, where the pubs were crap chain concepts, but at least they cleaned their lines more than once a year and you didn't run the risk of getting glassed. When Kirsty arrived, the Alma was the first pub that raised the standard. It helped turn Newington Green into a destination, starting ripples that spread. One by one, the other pubs near the Alma have been done up too. Newington Green is now a great place for a pub crawl, with the Snooty Fox, the Dissenting Academy and the Edinburgh Cellars all offering great beer and great food. This is great news for the drinker, less good for Kirsty, who now faces increased competition. Her response? Last year she organised the Newington Green Olympic pub crawl, which saw pubs in the area working together to create a fun activity, benefiting all the pubs that took part, making the cake bigger rather than fighting over shares of it.
What I'm basically saying is, to any rational observer, the Alma looks about as different from the idea of a 'failed or failing pub' as you can possibly imagine.
So how could it possibly be failing?
How could Kirsty be facing losing the pub - and how could there be a possibility that the pub itself might not survive?
I have copies of a pile of correspondence between Kirsty and Enterprise Inns that's about three inches high. She's spent most of her time over the last three or four years fighting her PubCo, which claims it only wants to help, on all fronts.
The basic problem, as she sees it, is that the PubCo model effectively means paying rent twice - wet rent and dry rent. Dry rent is the straightforward rental she pays to the PubCo. Rents are reviewed regularly. They can go down as well as up, but if the profitability of the pub increases, the PubCo will do all they can to take most of it, essentially disincentivising the publican from improving the business the way Kirsty has.
On top of this, she pays a 'wet rent' by being compelled to buy all her beer through Enterprise, or face stiff penalties for buying 'out of tie'. This limits the range of beers available to her. But more than that, she's paying up to double the price of a cask or keg compared to if she were able to buy it from the brewer direct. This means she has to charge higher prices for a less interesting range of beers than her competitors.
This is the double bind of the PubCo tie that many licensees are complaining about. Enterprise's defence is twofold: firstly, they will offer help to anyone who is struggling. And second, the publican knew what they were getting into when they signed the deal, and Enterprise can't be held to account if new publicans had unrealistic ideas. I'm sure that in some cases this is true. But the number of cases where people give details about being misled, lied to and ripped off by their PubCos means that if it's not true, there are an awful lot of 'failed and failing' publicans coming up with remarkably consistent and detailed lies.
Kirsty's battle with Enterprise is happening on so many fronts, it's impossible to go into detail here and still expect you to read to the end. But in summary, the result of this fight is that Enterprise now want her out of the business she has built up, and will shortly be taking legal action in an attempt to make that happen.
Should Enterprise be victorious, apart from a brilliant publican facing financial ruin and losing her home, there are two possible consequences: one is that Enterprise stick in another tenant. The other is that they close the pub down, and sell it for redevelopment, with a change of use stipulation - a fairly common practice. It takes all of ten minutes to walk to the nearest Sainsburys from Newington Green. I'm sure they or Tesco would love to turn this beautiful old boozer into yet another supermarket.
The next battle Kirsty wants to fight is to ensure that, whatever happens to her personally, the Alma remains a pub - given that it's popular and the local community like it that way. To this end, yesterday she launched the 'Battle for the Alma' campaign. She is applying to Islington Council to have the pub declared an Asset of Community Value (ACV) under the recent Localism Act. This would prevent Enterprise from initiating a change of use from the property being a pub. This was the first step in a campaign that ultimately saved the Ivy House pub in South London (http://www.ivyhousenunhead.com/) from being redeveloped into flats when the local community were perfectly happy with it as a local pub - which is now doing great business.
If you know the Alma, if you have ever been there and enjoyed it and wish to see it saved, visit the Battle for the Alma (http://www.battleforthealma-n1.com/) website and sign the change.org petition (http://www.change.org/en-GB/organisations/alma_n1_supporters), giving Islington Council the stories and reasons why the Alma deserves to be saved (beyond the simple common sense reason that it is a thriving, successful, popular pub that by any sane reckoning should not be under threat.) It will make a real difference.
I'll be writing about the lies, bullying and neglect Kirsty has suffered in due course - and asking Enterprise to respond. But this first step is important and urgent - we have until next week. If you know and love the place, please give this campaign your support.
More... (http://petebrown.blogspot.com/2013/10/tackling-thorny-topic-of-pubco-tie-it.html)