Monthly Archives: May 2010

Barrel Dregs, TOO LITTLE TOO LATE???? (53)

 

TOO LITTLE TOO LATE….todays heartfealt gripe.

Pot Boy really does not want to always be the bringer of crummy news.

In fact he would far prefer to bring good news, even glad tidings of good incomes, thriving businesses and happy contented families in the licensed trade.

Pity is that the total numskulls at grass roots level in Punch and Enterprise have lost the plot piloted by some of their jobsworths that either have no guts or will to think out of the box or who are scared witless of indepent thought and of making a decision that has not been sanctioned from on high.

Yes, yet again it is the inexperienced timeservers that are the Business Development/Relationship Managers.

Make me laugh, make me cry, but these people are, with a few exceptions granted, utterly useless and the cannon fodder of their paymasters.

If they could get a job in the real world they would learn to grow up and smell the coffee.

Fat chance.

Either they are totally lacking in practical experience or, as was admitted to Pot Boy this week, they are failed lessees that, gives me strength, are now telling new lessees what to do.

Two tragic cases hit Pot Boy where it hurt this week.

Both similar and both propping up the downright lie that the Pubcos are lending incredible financial support to struggling lessees so they are the good boys are they not.

Rubbish with a capital R.

The much heralded support is TOO LITTLE TOO LATE.

Numbers look impressive but its only scratching the surface.

Case one.

City suburban pub in mid Yorkshire.

Since the smoking ban, trade has plummeted, linked with factories closing etc, etc.

Total sales now £275000, rent based on pre 2007 trade £68K (no you have not misred the rent,£68K !).

Application finally made last October for a rent reduction.

Temporary discounts given which expired in February.

Back to the original rent PLUS repay by installments the rent concession.

Savings all but disappeared.

20 years plus trade experience and told by the BRM that they were not competent.

Change in BRM (fourth in two years) and this week the rent is reduced by £20K.

TOO LITTLE TOO LATE.

Lease not saleable and in all probability the lessees will leave the pub penniless and whoever comes in will be at a rock bottom rent or even a TAW, PATHETIC.

Case two.

Pub in the Cotswolds.

Request for a big rent reduction last year grudgingly granted but miles away from enough (£42K to £37K but Pot Boy thinks should have been £25K).

BRM recommends that the best way to generate trade is to spend your way out of it by theme nights, promotions, special food etc.

Pot Boy could be making this up, but the BRM is, would you effing believe  it, is yet another failed lessee and failed BRM in a succession of other Pubcos, (How did this jobsworth get his current job? Heavens knows).

All the tricks of the trade are tried but the sales levels settle back into its original style.

Result a sizable increase in the overdraft and guess what,the bank says enough is enough.

Cash with order, buying out, desperation stakes and all because the wretched BRM could not admit that the Pubco support was TOO LITLE TOO LATE.

Insolvency is on the cards as is the final realisation that the rent is still massively too high.

Pot Boy looked at the price list of the draught beers and ciders from an independent wholesaler that supplied in the period of buying out.

Yes,you have got it.

Between 40%-85% savings could have been made in the free trade.

You wonder why the tied trade is in the soft and slimey.

Look into the eyes of the Pubco BRM.What do you see….the back of his scull, because there is nothing of any note in there.

Yours battening down the cellar hatch,

Pot Boy.

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsiblity for them, we do try to avoid offensive or litigious statements being made.

Barrel Dregs, a Sting with an even bigger Sting in the Tail (52)

A client asked me to warn all my clients considering buying a lease.

He had recently sold his Pub Co lease having lost a figure approaching £60K, a large proportion on re equipping the whole place, he was very fortunate that he could just about stand the loss and was extremely resentful with hindsight.

The pub had been sold to a Pub Co around five years ago, having been a freehouse.

The vendor at the time was always a trifle quick with his actions.

The pub was sold for a good price to the Pub Co with supposedly a good turnover to match the price, the first lessee traded for a year and vanished overnight, the second lessee made a total mess of everything and finally sold to my client with some unaudited accounts, possibly ten minutes ahead of the bailiffs.

My client spent a vast amount of money to set it up as food based destination pub and struggled, finally selling to a young man who is not finding it easy.

My client also knew the original vendor fairly well through other connections and was offered a copy of the original accounts as a guide.

The BDM, who had been involved in the original purchase claimed that the turnover when they bought it was well in excess of £340K and therefore justified the rent demanded.

However the so called genuine accounts given to my client were in the order of £220K, his own trading figures were running at some £40K less than the so called genuine accounts.

It raises some very interesting questions, did the original vendor Sting the Pub Co on a second set of accounts?

Did the BDM tell Porky Pies to each lessee to justify the rent?

Which ever it is, the bigger Sting in the Tail is that every lessee has been struggling with unsustainable rents and possibly target figures that have no relation to the business available, which they are now well aware of. 

If the figures have been falsified by the Vendor or the Pub Co, which we will never know, the irony of this is that it is not the first time that this pub has had false figures to effect a sale.

The original vendor is sunning himself in warmer parts, with a smile on his face, who Stung Who?

The moral to this story is make sure that all the numbers add up and if in doubt consult a knowledgeable professional.

Legal Eagle

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsiblity for them, we do try to avoid offensive or litigious statements being made.

Barrel Dregs, send us your story. (51)

We have a number of industry luminaries who would like to raise some issues but cannot be named, by request we have set up “Barrel Dregs” for tongue in cheek articles hitting the soft spots of offending companies and people, not to be libelous but to make them think.

If you have an abuse or rank stupidity that we can raise and generate some humour or horror, please send it to us.

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsiblity for them, we do try to avoid offensive or litigious statements being made.

Your article will be anonymous.

Barfly

Barrel Dregs, no names are mentioned yet a Pub Co identified itself immediately????? (50)

Seems that Pot Boy touched a raw nerve with his “horror story” of yesterday.

One of his moles, very highly placed in a particular Pubco, tells him that one or two people were, as the mole put it, “throwing their toys out of the pram”.

Apparently, what Pot Boy was told (and first hand at that) could not have possibly have happened, dear me no !

Nice to know the powers that be, have a gander at Pot Boy and his mutterings.

From the same source, it seems the Pubcos are far from happy bunnies at not getting it all their own way with the fiddling around with the regulations at the RICS.

Pot Boy remembers full well that the great and the good in the entire pub industry, yes the whole kit and caboodle, guided by the BISC enquiry in March 2010,are waiting with baited breath on the white smoke, not the black smoke coming up from the RICS chimney.

The BBPA,  the BII, FLVA, IPC and he thinks maybe the ALMR are all saying that they will abide by the RICS rule changes, which from memory should have been published by now, ie; the end of May.

Well no dice, some are alleging that the Pubcos are scared witless perhaps that if the double six does come up against them, they will be shown up as the rule benders in chief.

Moley says that the arch fiddlers of the system will do anything to preserve their toxic debt mountains from crumbling.

Lots at stake apparently and Pot Boy’s mole is keeping his head well below the parapet to be able to come up with some more and specific goodies in the near future.

Pot Boy cannot see the industry sitting on its hands while the RICS endlessly debate some simple rule changes or whatever.

There must be squillions at risk if the Pubco in question is getting as jumpy as all that.

Will the corridors of Pubco power be running with blood rather than beer.

Well OK, not beer because they do not make the stuff, and for that matter do not even soil their hands with its delivery.

Just take an obscene rake off.

Nothing changes in the jungle.

Good job the cellar hatch was open.

Amazing what you hear from the most impeccable of sources.

Pot Boy……..

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Barrel Dregs, this is the real bottom of the barrel, so much for COP’s (49)

…….Pot Boy stumbled on a proper horror story today,that ruffled his otherwise unshakable faith in human nature.

The case is the subject of Court action for all sorts of issues stemming from massive over renting and a total horlicks of  resulting concessionary rental negotiations.

Not wishing to compromise things too much for the moment, identities, place names etc have had to kept confidential.

Town center bar/club,pubco lease.

Total sales 2008 were about £375000,2009 about £280000,this year even lower.

Rent £60K plus linked to RPI annual indexation.

Last formal five yearly rent review the Regional Manager comes in with the rent review memorandum to increase the rent.

No prior consultation.

The following is the summary version of about a fifteen minute conversation.

“Sign here, sign now or you will cause yourself a load of problems.

If I go out of here with this unsigned you will be out.

No option, if you fight this, it will cost you at least £10,000 and you will loose.

We always win so sign the paper now because I’m not going without your signature.

If you don’t sign you had better start looking pretty quick for another profession.

You have no choice,we are being reasonable, its only a small increase.

Look, crying won’t make this any easier.

I’m definitely not going until you have signed.

Don’t force me to walk out of that door.

You are forcing me to do it.

You know its in you best interests not to fight and anyway you can’t afford to fight us.

Money is no object, sign here (offers his own pen)…she signs.

OK, so hindsight is  a marvellous luxury and Pot Boy would have stood his ground and told the Regional Manager where to stick it !

But life is not always cuddly and smooth edged.

This industry will go to hell in a handcart if bullying and intimidation is not rooted out once and for all.

It is no good for the industry to allow those in charge at the top of the pyramid to preach love and partnership,and then turn a blind eye to the troops at the coalface getting a result any which way they possibly can.

New Codes of Practice will never ever stamp out this sort of behaviour unless the Codes are drawn up with the consultation of the lessees.

Is that happening ?

Not a chance,and until it does and there are sufficient safeguards against the bully boy tactics, nothing will change.

Makes the blood boil…….

Potboy, on a bad day at the front.

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Barrel Dregs, Codes of Practice an obvious question? (48)

Pub Co Codes of Practice an obvious question?

The Pub co’s are happily drafting out their individual COP’s some backed by an array of Legal Eagles, smiling happily at another nail hammered into the tenant rabbles coffin of penury.

The Legal Eagles beaming at the fees generated at every loophole blocked that escaped in the old inherited leases, maybe a quick phone call to another colleague engaged on the same pursuit to ensure a unanimous front when submitted to the dear old BII for approval, we can’t have any blacklegs, maybe a slight variation to avoid any accusations of collusion.

What’s an odd 60 plus pages in legal costs, a mere bagatelle in terms of ensuring corporate security, anyway, it’s only a voluntary agreement, it has no legal standing when push come to shove, we might get our knuckles rapped for an infingement and a paltry fine by corporate standards.

It’s worth it as a sale gimmick to have BII Accreditation for Codes of Practice for any newcomers looking for pubs, cheap at half the price.

The one big question?

Has anyone asked the tenants and lessees for their input, they are the main recipients of these COP’s, I have yet to hear fron anyone that they have been consulted by any pub Co, the assumption that they are incapable of voicing a constructive opinion in any capacty, as a working group, singly or collectively is obscene.

This is supposed to be a working agreement to make the industry fair and transparent, it should be fair and explicit to both sides if it is to stand the test of time, these so called COP’s can only be one sided, if drafted by one side, who are already the offending bodies from the Select Committee Report.

The majority of these companies have nearly all breached any voluntary code that operated when the industry was a career for life and brewers sold beer as their core business.

The people that form the BII Body to approve the COP’s will not read this article, but should any of them do so, would they like to consider that the only agreement that will work in the long term is one where both sides issues are resolved collectively and not by an array of Legal Eagles, people that own pubs and have no current experience of running pubs, representing their interests only.

Cellarman

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Barrel Dregs, Government Leisure Industry Initiative (47)

Government Leisure Industry Initiative

At long last a Government that recognises the vital importance of the Leisure Industry in stimulating a struggling economy.

It is the only industry that can move quickly without a massive injection of cash and time delay, the pound is low and tourism is the key.

We have one massive blot on the Pub Industry that can deprive us of growth and gaining the maximum benefit of a Government encouraging foreign tourism and the weak pound.

Pub owning companies, the majority of these companies have been infected by high rents and the tie, licensees are struggling with a shrinking market and excessive overheads and minimal discount.

These companies are not interested in practically boosting the economy, but extracting every last penny by whatever means is technically legal to service their debt burden, overheads and overpaid hierarchy, very few truly understand the pub industry or have run a successful pub.

Sadly these vast estates of pubs in the main have very little lessee money to invest in their businesses because they are being screwed by the landlords, if they were not they could invest in expanding and developing their businesses, to take advantage of any Government initiative to develop tourism and their own core businesses.

The industry is sick with far too many Fat Cats from Pub Co’s to Professional guidance,  bleeding the struggling licensees of any vestige of reinvestment capital.

The problems of the economy do not apply to the Fat Cats, the majority have far too much money anyway, yet these idiots are still in positions of influence in the industry, pontificating about ways to run a business, the majority of licensees are very capable, but they cannot combat obscene rents and virtually non existent discounts.

So called Rescue Packages, which give a short  term respite, yet cost you more at the conclusion of the package.

The BII have a Mandate to Police the Industry, this is easier said than done when certain senior members feel that their future lies with the major Pub Co’s, the BII is a Members Organisation,  this should be remembered at all times and not a vehicle for endorsing Pub Co doctrine.

The Codes of Practice appear to be turning into a farce, with each company generating reams of legalistic paperwork, far in excess of the original lease, the Codes should be simple and explicit and fair to both sides, not protecting  Pub Co deviousness and one Code for all Companies which is legally binding and enforceable with draconian fines for abuse.

The point of this article is that the Industry would appear to have an opportunity to regenerate itself and make a serious contribution to energising the economy, but it cannot with the trading restraints constraints put upon the bulk of the Industry by the Companies that own the freeholds of these Pubs.

If you agree with these comments, please email this article to the Government or your MP or both, the restraints imposed by these companies have to be changed if we are to assist in helping make the economy grow.

Cellarman

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Barrel Dregs, Rent Reviews and Appeals

 Rent Reviews and Appeals

Regrettably I had to remove some of Pot Boy’s expletives, since Google would be offended, but I think he has got the points across ( Barfly)

Pot Boy has bitten the bullet and teamed up with a well respected firm of Chartered Surveyors (covering all of England and Wales) to provide his readers with advice from people that definitely have not taken the Pubco Shilling.

He has also linked with a selected bunch of like minded specialist Licensed Property Solicitors on a regional basis to counter the slippery tactics of the Pubcos and their equally slippery legal advisors.

For goodness sakes,how can firms like Fleurets,Colliers,Davis Coffer Lyons,Christies,Savills,Brownhill Vickers and many many other Nationals be perceived as giving truly independent rent advice to tenants when at the same time their firms are openly giving advice to the very Pubcos who are screwing you for rent.

The Pubcos ensure that shed loads of fees still keep coming tumbling in through their doors so you can hardly expect them to spit on the hand that feeds them.So how does the good old system keep on rolling you ask yourself ?

The “independent expert” finds a middle way,one that won’t get the Pubcos totally p…..d off so that they will disinstruct the firm concerned.

Human nature in these recessive times when agency departments are seeing their pips bleed.Its jobs innit !

Pot Boy is not one for hunting with both the huntsman and the fox.

To me its either black or white, not wishy washy shades of grey.

So what do we think about the pickle we have got ourselves in for settling a rent at rent review that you don’t agree with and which you are getting no sympathy from your Pubco/Brewer (the two types at times can be horribly the same) .

First hurdle is that the Lease normally allows for Arbitration to solve the problem.

Expensive and slow,BUT and its a big BUT,you are protected by the Arbitration Law,which we understand is megga powerful if used by a skilled professional.

In steps the good old BII, bless ’em, to offer a cheap alternative in the shape of PIRRS.

Well trust us, cheap it aint.

By the time you have paid (in advance) your £1500 plus VAT (min) and got your Solicitor to oversee the binding Deed of Variation entered into between both sides (its a legal change of the lease) there’s another Grand gone.

Then you hire a good solid professional to do the necessary against the Pubco Chartered Surveyor and there is no change out of five big ones.Cheap ?

No siree !

You could of course represent yourself and indeed some do,but watch out !

Ever wondered why your ever loving “Partner”in business,the Pubco,loves PIRRS ?

They will hire in a skilled Chartered Surveyor and with the result being totally binding with no appeal (remember that Deed of Variation) its like sticking you head into the lion’s mouth.

Pot Boy can send you a one page questionaire in total confidence to help with the first vital step to find out if you have a rock solid case.

It is FREE and with the help of our on board people, we can give you a thought out overview of your chances of success.

Sad what has been highlighted in the Morning Advertiser forums of late.

The PIRRS system seems to be creaking at the seams.

Its so called experts sitting in judgement, seem to have no idea of the real cost of running a pub (that ‘cos the Pubcos tell them what to think ).

Get a little real here, 22% total costs excluding rent or 35% including rent.

What planet are these guys on ??

Racing cert that none of these guys have ever run a pub in their lives yet they are sitting in judgement.

Why ignore the tenants accounts?

Give you one big fat guess !

Because the expert allows himself to make up the costs and the gross profit margins that go into the profits test rent calculation and bingo, big rent, pubco happy, expert acted impartially of course he did,continued flow of work keeps rolling to other departments in the same firm.

Everone happy ?

Er, not quite, the poor tenant seems to have been stiffed but the result is totally binding.

Feedback from the first few PIRRS cases reveals some rent reductions,but in the cold light of day,by not nearly enough.

OK so a reduction has been achieved in some cases (not by any means all) but when there are some cases where no reasons are given it leaves a funny taste in the mouth.

You pays your money, you get an answer and you don’t know how the Expert got to the conclusion, outrageous !

 Then, to cap it all, when you have the result,you are not supposed to tell anybody.

No wonder the Pubcos are lovin’ it.

So much for growing transparency in rent review.

Seems like the BII walked onto the classic sucker punch thrown by thre Pubcos.

Pot Boy will spread the news far and wide of any PIRRS result that he hears of.

As for breaking confidentiality,I wonder if the Pubcos will take any action even if it happens.

Make them look like a load of Wallies if they did.Oh and finally, Pot Boy is having a good solid look at the real possibility of insurance against rent review disputes.

More of the research in later ramblings.

Yours down below,

Pot Boy.

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 for the attention of Pot Boy and we will pass it on.

ALMR has slammed Tesco’s hypocrisy on low cost Alcohol

 

ALMR SLAMS TESCO HYPOCRISY

Date: Friday 21st May 2010

The Association of Licensed Multiple Retailers has slammed Tesco’s hypocrisy today in welcoming a ban on below cost selling of alcohol whilst continuing with the practice in store.

In an exclusive interview with the BBC today, Tesco’s Director of Corporate Affairs said the supermarket chain wanted to see curbs on the sale of cheap alcohol during this parliament and recognised that excessive drinking fuelled by cut-price booze was one of the public’s most serious concerns.

At the same time, Tesco is running a promotion offering two packs of beer for £16 – the equivalent of 23 pints at a price of just 67p per pint, compared with a pub price of £3.

Nick Bish, ALMR Chief Executive, said:

“To borrow Carlsberg’s line: Pubs don’t do hypocrisy.  Tesco do.

Tesco’s price promotions are opportunistic, unacceptable and in complete contrast to the highly responsible approach to drinks pricing adopted by Britain’s pubs and bars. This is probably the most hypocritical offer in the world!  

Effectively they are admitting that they are not responsible enough to regulate their own behaviour and have no option but to compete on price in the absence of government action. Whatever happened to “reassuringly expensive”? We hope Tesco will start practising what they preach and adopt a more responsible approach over the summer during this year’s World Cup.”

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John Gaunt & Partners, Test Purchasing

With reports in the press that Durham County Council are looking to revamp their test purchasing strategy by raising the age of under aged testers from 16 to over 17, and allowing youngsters to work in pairs in the evening, which it hopes ‘will improve the effectiveness of test purchasing’, it is perhaps timely to remind that LACORs has previously issued guidance on this subject, last updated in March 2010.

The relevant extract on the age and appearance of volunteers follows:

  • “The young person must not look older than their age. It is acknowledged that child development is not an exact science; however, the young person should be representative of their age group.
  • A useful test may be drawn from Section 146 the Licensing Act 2003 where part of the defence states “nobody could reasonably have suspected from the individual’s appearance that he was aged under 18”. If therefore a reasonable person assesses the age of the test purchaser to be below that stipulated for the product being tested then the young person will be deemed to be suitable for the operation.
  • Consideration should also be given to the clothing, jewellery and makeup worn by the young person. The purpose is to replicate as far as possible reality, therefore, within reason, the young person should be permitted to wear their normal clothing for visiting the particular establishment under test. For example, if the operation involves an on licensed premise, it may be normal practice for the young person to wear make up and jewellery. Nothing in this guide advocates that the young person should make a deliberate attempt to make themselves look older than they are.”

The full guidance can be found at: www.lacors.gov.uk

Interestingly the similar Guidance for Scotland recommends that ‘volunteers should be at least 18 months younger than the legal minimum age for the purchase of the product in question’.

For further information, please contact John Gaunt on 0114 266 8664.

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