Monthly Archives: March 2012

JG & Partners, March licensing update, always an interesting read.

Welcome to our March licensing update 

Please find below our March 2012 update in which we hope that you will find some matters of topical interest.

Many of you may have received our bulletins last week on the (rather rushed) announcement of the Government’s Alcohol Strategy (Link) and the slight postponement of the introduction of certain measures from the Police Reform & Social Responsibility Act from 6 April to 25 April (Link) – and so we will not labour this further here.

As always, where the headings below are in red, it is a link to the full item as it originally appeared on our website. Please click on those titles for further detail. If you have not received this update direct but in future would like to do so, please register your details here.

 

Olympic Sunday Trading ‘relaxation’ 

Possibly the month’s ‘big’ news for large store operators but all is not as simple for licensed premises, as it would first appear. Amendments to licences are likely to be separately required. Click on the link above for more detail.

 

Budget ‘highlights’ 

The above was announced as part of the Budget statement. If you are one of the few who may have missed the Budget essentials for the leisure industry (there seem so many circulars out there), click on the title.

 

TENs – beware EHO cometh! 

Changes in the procedures surrounding TENs (now postponed until 25 April) leave a small window of opportunity to get those possibly controversial notifications lodged before the EHO will have their say and conditions can be imposed. Early submission in respect of the Olympics, as we have mentioned before is also recommended.

 

Annual Fees – suspension of licences for non payment 

The forthcoming changes are summarised in the above. This will bring England & Wales into substantial alignment with Scotland where this month has seen a number of high profile licence suspensions for non payment of annual fees. For retained clients, we provide a full and comprehensive annual fee payment service – designed to avoid such possible issues. For more detail, please contact Kate Redford

 

JG&P psychic prowess 

Our item reminding on the restrictions of betting in pubs, triggered by the Cheltenham Festival, was followed by enforcement activity in the Borders region the following week – during the festival.

 

Dealing with the “problems” of late night drinking 

A final reminder that this consultation on secondary legislation for the Late Night Levy and Early Morning Restriction Orders, expires 10 April 2012. We have dealt with this in previous updates.

 

 

And lastly, West Yorkshire Police have unsuccessfully tried to remove the licences for two petrol/convenience store ‘forecourts’ on Review, claiming that there were in reality garages and therefore prohibited from selling alcohol. A very unusual case and it will be interesting to see if they try and pursue this further on appeal. For more details please click here.

Massive Rent reduction against a Pub Co. Barrel-dregs (242)

Massive Rent reduction against a Pub Co.

Sanity at long last is permeating through, unfortumately you do need professional advice before you get the real reductions, whether it’s a Free Strength of Case Review, which, if the result is positive you can spend some money and take action yourself with the right information or spend considerably more and have a professional act for you.

If you spend between £1K and £4k and save £20K on your rent annually, that’s a lot of net profit going to you and not to a bottom less pit of debt that some Pub Co’s have.

At this moment of time you might think you know how to argue your corner on rent reviews, but without the right technical arguments and information, you are close to Cannon Fodder.

I’ve been in the Pub Business for years and have never had a pub lease and I have leased out commercial property at fair rents, but when I was asked to look into Pub Rents with Pub Co’s, I couldn’t believe the amount of information that should be available and is not disclosed, the cherry picking of comparable rents, that bear no relation to the pub in question, in a word it is as bent as a Fiddlers Elbow, the RICS Guidelines are filed under miscellaneous and where ever possible paid lip service to or ignored.

If Pub Co’s helped people run pubs with sensible rents, the world would be different, in stead we have confrontation and  very few surveyors who genuinely act for lessees and are not linked to Pub Co’s, stay away from any surveyor or company that acts for a Pub Co, that is useful advice, many could orwill be out of a job if they go against their main clients.

When rents are down to roughly 8-10% of turnover or less, licensees will start making a profit again.

 

A Sheffield licensee is “absolutely ecstatic” after managing to secure a rent reduction of almost 50% from Enterprise Inns.

‘Absolutely ecstatic’: Claire Bidwell and husband Barry

At a September 2011 rent review, Claire Bidwell, licensee of the Old Crown in Hillsborough, was offered a reduction of £4,046 by Enterprise — from £58,046 down to £54,000.

David Morgan, of Morgan & Clarke chartered surveyors, advised Bidwell that a significant rent reduction was merited, and put together a full report of the pub’s financial details that was presented to Enterprise as evidence. After further negotiation between Bidwell and Enterprise, the rent was reduced to £30,000 — almost half the original rent.

Speaking to the PMA, Bidwell said: “I am absolutely ecstatic about it. Licensees are always complaining that they can’t make ends meet but this just gives hope to other licensees, and shows what can be done.

“Now we will be able to plough some money back into the pub,” she added. “The jobs we couldn’t get done before we can now do, and all the contingency money had gone, so hopefully we will be able to get some of that back.

“It’s just knowing we don’t have to pay that extra few thousand pounds a month.”

Morgan, who advised Bidwell in the rent review process, said: “We felt that Claire merited this reduction because of the fact the rent was hugely high, and she was offered only a little bit off to start with.

“It was then left to Claire to battle it out and she did very well. She was satisfied she got the reduction she received, almost half the original rent. It is one of the largest cuts we have seen.”

Morgan added: “There are an awful lot of rents that are just OTT, up to 50% more than they should be in some cases. What is always completely forgotten is that the rent has to be affordable up until the rent review. You have to look at it and ask, ‘is it still going to be affordable in three years’ time?’.”

Enterprise said that it would not comment on individual cases.

Barfly

Barfly

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

 

A letter to The Guardian on Punch Taverns and the Industry. Barrel-dregs (241)

PUNCH ACCOUNTS YEAR 2011.

 

Now that the accounts have been published there is the opportunity to examine the detail more closely. The first important note is that in some cases the comparative of the previous year has been adjusted.

 

1.       There are 5,004 pubs worth £2,782 million with borrowings of £2,781 million and shareholders’ funds of £202 million.

 

2.       The average debt per pub is £556k [term and derivatives]when the average value is also stated as £556. So the real borrowing is just about equal to the debt. But is it? See 10 below.

 

3.       It looks as though Punch have managed to maintain its own earnings per pub  at £61k, with rent staying at an average of £27k per annum, virtually the same as 2010.

 

4.       It needs to be noted that the average shareholders fund per pub is a mere £40k.

 

5.       That £61k average per pub includes the very significant additional wholesale profit of about £14k per pub so the real wet rent is £47k. That wholesale profit is the additional element obtained as a wholesaler and not relevant to the value of the freehold properties.

 

6.       It is known that barrelage has fallen, manufacturing prices have increased, but so have the discounts given by the manufacturers. Although these movements have been overcome by Punch as seen by the maintenance of earnings per  pub it is very unlikely that the 5,000 plus tenants have managed the same.

 

7.       These Punch figures  indicate that the average rent per pub is £27k and it is known that Punch make the assumption that the tenant would earn the same. The detailed survey carried out by the BISC indicates that at least 67% of those pubs actually earn only about 50% of that figure, but say £15k.

 

8.       Given that the real income for the average tenant is only£15k and then there is the 47k wet rent paid one can reasonably assume that if all those 5,004 pubs were operator owned free of tie properties then their average profit would be £62k per annum.

 

9.       So there are two questions. On what basis have Punch valued their assets and what would be the maximum value that could be sustained if owner operated free of tie, which is the rightful level that should be placed on those assets.

 

10.   The second question is easiest. Any person taking a history of profits for a pub generating £62k would be lucky to secure borrowings of around £225k and that is provided they had personal funds of about £100k. This just goes to show how the borrowing of £556k by Punch is unsupportable and the difference between the supportable value that may be as high as £325k still leaves a huge gap of £231k per pub which in not covered by shareholders funds of £40k.

 

11.   The properties have been valued according to the notes in the accounts but at £556k the validity must be questionable. Even if erroneously the properties were valued assuming that tenants earnings would match those of Punch, and the wholesale profit was also taken into consideration the value would be in the order of 7 times profit. That cannot be sustainable, and must be seriously challenged.

 

12.   Finally if the 2011 operating profit of £76 million is maintained in 2012 with Depreciation of £17 million and a tax bill of potentially £23 million that would leave only £70 million. But there is £61 million of term finance to be paid leaving barely £9 million.

 

The future looks bleak and the bond holders are potentially in for a large loss, very large loss.

 

If Punch were forced to observe the “prime principle” then it is estimated that their profit would fall by possibly £85 million which would project the operating profit of £76 million to a loss of £10 million and the company would have an annual cash flow deficit of in excess of £52 million.

END OF THIS   NEXT   You will be aware that the Government have been dragging their heals over the BISC report, and that has been compounded by RICS failure to live up to any reasonable ethical standard. I have written to Norman Lamb along the following lines but I do not believe there is the remotest chance that anthing will happen. Someone, or perhaps a newspaper such as yours need to get behind the arguments and the most important is the prime principle [see below]. The big probl;em of course is that if Punch and Enterprise were forced to prove adoption of the principle in each pub rent review they would both go bust and the city and government do not want that to happen. Then of course there is the duplicity of RICS who claim one thing then make sure that their members can turn a blind eye. Very seedy indeed, and lets face it the banks only ever lend money if a valuer has said it is supportable so when one looks back to the financial crisis it is not all the fault of the banks, RICS and its members have been hiding their implication for fear of worldwide actions against them. Please read and come back to me if you want further information.    Outline of letter:-

I understand that Norman Lamb has been appointed the Minister for Employment Relations, Consumer and Postal Affairs and he will now be responsible for all issues emanating from the report delivered by the BISC and also the Government response.

 

There is considerable concern relating to the application of the supply ties by pubcos and their failure to ensure and prove conclusively in each case that the prime principle that the tied tenant is not in a worse financial position than if they were free of tie, is always applied.

 

All should be aware that

 

                  ·The prime principle originated from the EU to ensure fair competition, embracing tenants and consumers.

 

                  ·It was agreed by the EU and UK competition authorities that  prime principle is a prerequisite that needs to be satisfied before a supply tie can be applied or enforced.

 

                  ·The UK Government has previously endorsed the EU regulation supporting fair competition,

 

                  ·Both the TISC and BISC reports between 2004 and the most recent supported that prime principle.

 

                  ·That the OFT has never ensured that the prime principle is taken into consideration in any of its findings, in fact they have never ensured that this fair competition issue    has been included or observed by the brewers or pubcos; surprising in that the word  FAIR is in their title.

 

                  ·That the Royal Institute of Chartered Surveyors, having taken legal advice, confirmed that they accept and have always accepted the prime principle. The fact that from the President down there is no-one in RICS that has the boldness to chastise or reprimand members who fail to enforce the prime principle is another issue 

 

                  ·That the failure to ensure that the prime principle is applied has the effect of diminishing the income of the average tied tenant by £15,000 a year and inflate the   price of an average pint by 50pence a pint or more.

 

The above are just a few of the issues that have been totally ignored in the Government Response. Lisa Smyth, a spokesperson for the BIS has commented on the policy official’s view on the OFT final decision on CAMRA’s super-complaint. In truth the OFT said in their report that it wasn’t in their remit to look at commercial contracts between business to business relationships and in addition there is absolutely no reference in that OFT report to the prime principle, its existence, its necessity, or the grounds for its exclusion in their response. These matters seem to be just ignored by Liza Smyth, or her colleague Iain Mansfield.

 

The simple question is this. Given that the Government is pro competition, has accepted and endorsed the prime principle, why has it chosen in the publication of its Response to totally ignore that fundamental prerequisite to the supply tie, namely proof of observance of that prime principle?

Observance of the prime principle towers above all the other matters such as codes of conduct, lower taxes or even vat. As much as I would like to support David Cameron I do believe that he has now let down every publican, and the drinking public by his recent attempt to have the whole issue of the BISC report and the prime principle thrown on the scrapheap. Try he may but the problem is not going to go away if he expects the duplicitous pubcos to start becoming responsible, because they can’t afford to they would be bankrupted.  I hope that the chairman of the BISC, Adrian Bailey, won’t let go and will continue to pursue all these issues with the uttermost vigour     I am sure you will realise that these issues have been pushed by me over the last couple of decades, particularly the 2004 TISC and more recent BISC reviews. While it appears to be a complex subject it really isn’t, but pubcos and the BBPA as wll as RICS  would make everyone believe it is, because it then justifies their argument that it is difficult to change.

Note:-Not bery impressive reading for one of the major pub owning companies in the UK.

Barfly

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

Endsleigh Business Insurance

Endsleigh Business Insurance

Whilst Endsleigh is known for providing insurance for students, they also have a successful business insurance arm; offering everything from Public Liability Insurance through to cover for Leisure Trusts and Charities.

Within this, they have a dedicated team providing retail insurance for small businesses such as shops, restaurants and pubs.

As standard, cover includes seasonal increase in the amount of stock insured, employer’s liability cover of £10 million, commercial legal protection and £2,000 of cover for outside catering equipment. They also provide Public liability starting from a minimum of £2 million, business interruption cover, and equipment breakdown.

 

For more information on Pub Insurance, take a look at their website: http://www.endsleigh-business.co.uk/Pages/pub-insurance.aspx

 

For other types of business insurance, visit: http://www.endsleigh-business.co.uk

Mountford rejected as PICAS vice-chair. Barrel-Dregs (240)

Mountford rejected as PICAS vice-chairman

 

David Mountford, who like most of us, have been battling for a fair unbiased body to regulate the Industry, has been rejected as vice-chairman of the panel at the Pubs Independent Conciliation and Arbitration Service, known as PICA-Service.

Dave has been in dispute with Punch over his rent review, has been told there is no vacancy for Vice Chairman as the board has approached an existing panel member for the role, is that another Pub Co stoolie?

Mountford said he was “devastated”, after he wrote a letter to Bernard Brindley of the Pubs Independent Rent Review Scheme (PIRRS) earlier this month putting himself forward for this position.

Sadly the BII under their existing management, have no desire to be associated with humble thinking members taking such an exalted role in what is supposed to be a totally independent arbitration body.

I suggested that I might like to put myself forward for the panel, regardless of the fact that I had been a very brief member of the RICS, long before I bought my first pub, the mutterings that came back to me were that I hadn’t got a Cat’s Chance in Hell, are well what’s another Pub Co closed shop among so many?

One of the key participants of PICAS has allegedly enjoyed a close working relationship with one of the worst Pub Co’s mentioned in all the BISC Inquiries, does the remainder of the panel enjoy the same working relationship with other Pub Co’s, do any of them have leases with theses Pub Co’s, if there are any serving licensees on the panel,  are they enjoying beneficial terms over and above that which a normal member would enjoy?

This panel has to be squeaky clean, unbiased and not tainted with any Pub Co’s patronage in any shape or form, or is that demand impossible to meet?

The alternative is a mixed balanced panel with a totally unbiased Chairman, who has not and cannot be influenced by either side, to make the casting vote should that decision be required.

Brindley, independent chairman of PIRRS, which is overseeing the new service, confirmed someone had been approached. He said: “We are going through an interview process and a decision will be made within the next couple of weeks.”

Brindley confirmed the first PICA-Service case would take place on 12 June.

The whole thing stinks of decisions behind closed doors, the BII hides behind it’s Charitable Status, yet is sinking further and further into a mire of secrecy, why shouldn’t Dave be invited for interview, who is the secret gnome being appointed, surely the whole process should be open and above board.

Some of us want an open, honest, fair and squeaky clean industry, sadly the industry has gone too far down the road of grabbing landlords with more tricks than a Circus Dog.

Barfly

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

Another successful business failure, Barrel-Dregs (239)

Greene King that once Family brewer that is no more a Family Brewer.

Sadly another Pub Co that we would never recommend to any of readers, when will these companies that have followed the Pub Co model realise that by destroying good operators and in turn good businesses by unsustainable rents, as quoted here in an extract from the PMA, they are effectively destroying the industry.

The stupid aspect of all this is that Indigo who have taken over one of the pubs are possiby on some highly reduced rent, which defies belief.

The whole business is disrupted, customers go elsewhere, for what, some area manager or director who has never ever run a highly successful pub, being dogmatic, rather than pragmatic, the industry is full of failed execs with no real experience at the coal face and sadly they call the tunes.

 

A Lessee has spoken of his heartbreak at having to hand back the keys on two Brighton pubs with a combined annual turnover of £1.25 million.

Tony Leonard, who in partnership with Dominic McCartan ran the Spotted Dog and the Eagle, blamed the decision on “unsustainable rents” and a breakdown of the relationship with Greene King, their landlord since 1999.

The Spotted Dog, formerly the Hop Poles, reopened only six months ago on a partial tie allowing them to sell a wide range of cask and craft beers. It had already been named finalist in Brighton CAMRA’s Pub of the Year and the Brighton Foodie Awards.

“It’s been heartbreaking,” said Leonard. “We have twice turned that pub into one of the best in the city over the course of 12 years. How can you take £1.25 million from two pubs and not make any money from them?

“On the other hand, it’s a massive relief that we’ll never have to deal with Greene King again.”

Rent at the Spotted Dog was £79,000 plus 10% of turnover, equivalent to 207% of the divisible balance, and the partners had been trying to renegotiate the deal. “But in the end all we got from Greene King were solicitor’s letters,” he said.

Leonard and McCartan will now focus on their remaining freehold, the Snowdrop in Lewes, before looking for a second freehouse.

A spokesperson for Greene King said: “We have had a long relationship with Dominic and Tony, which included joint investments at both sites. Unfortunately this has now run its course and we have parted company.

“We won’t provide detail on individual agreements, however we always try to agree fair and sustainable rents.

“The two pubs have now been taken over by first rate entrepreneurs.”

The Spotted Dog will reopen this weekend (March 23) as the Cask and Kitchen, run by London craft beer entrepreneur Martin Hayes on a completely free-of-tie lease. It will be his third pub following the success of the Cask in Pimlico and the Craft Beer Company in Farringdon. Talks are underway on a fourth site, also in Brighton.

The lease at the Eagle has been taken on by local operator Indigo.

 

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

 

It’s good to talk to your MP, the humour of Robert Sayles, Barrel-Dregs (238)

It’s good to talk to your MP

Profuse apologies for the site being down over the last three days, a glitch in the administrators in the USA

Start a new thread By Robert Sayles, 14-Mar-2012

Related topics: Robert Sayles

I met up with my MP William Bunter recently and suggested popping along to a pub for a pint and some lunch. Eventually, we managed to find one that hadn’t been boarded up and ventured in. Arriving at the bar we ordered a couple of pints. I was in the process of retrieving some money from my pocket when William intervened.

“No, no Bob. I’ll get these” he insisted.

“Are you sure?”

“Absolutely” he replied, taking a £10 pound note from his wallet.

“I think you’re going to need a bit more than that William.”

Confirmation of that fact was not long in coming.

“That’ll be £11.80 please” said the barmen as he placed our drinks on the bar.

“Bloody hell” exclaimed William as he handed over the money, “this pub is a bit pricy, isn’t it?”

“Welcome to the real world Billy. No Westminster discounts here I’m afraid. You have to pay full whack, just like the rest of us.”

“How can people afford to pay these prices?”

“Well the simple fact is they can’t. That’s the primary reason why so many have long since deserted pubs.”

“God I remember when I used to go to the pub, a few years ago now it must be said, drinking beer was an affordable experience. What happened?”

“Well” I replied, “there are those who suggest pubcos and brewers are colluding to hike the price of beer”.

“Really” said William, looking somewhat perplexed. “That’s not what Ed Davey told us. He insisted that continual price hikes were down to the soaring cost of hops and energy.”

“You were misinformed. I’ve spoken to several hop farmers recently and all assured me that they’re tied into long term supply agreements. This provides large brewers with a safety net; guaranteeing a set price over an extended period of time.

The same applies with energy. Just like publicans, brewers protect themselves from fluctuations in the market by signing long term agreements. This notion of costs rising annually is nothing more than smoke and mirrors.

We’ve had a few bumper hop harvests in recent years, most notably 2009. Didn’t result in the price of beer coming down though, did it?

The fact of the matter is that pubcos’ priorities, particularly those saddled with large debts, lie in driving wholesale price lists up whilst obtaining increased discounts from the supplying brewers to secure greater margin. It’s a win-win situation for both parties.

Of course it’s the publican who ultimately suffers. As soon as s/he passes those price hikes on to customers more and more vote with their feet and leave. It’s a vicious cycle. The pubcos are strangling the life out of the industry; taking more and more of the cake and leaving less and less on the plate for their so called partners.”

“So why don’t tenants vote with their feet and leave?”

“The majority can’t, they’re tied into lease agreements. You see the dream was to take a pub on a lease, build up a viable business and eventually sell it on, a nice little nest egg for retirement.

As recently as 2006 leases were changing hands for as much as £200,000, sometimes even more.

Unfortunately those days are long gone. In many cases you can’t even give a tied lease away now. People no longer view them as viable.

Drink up; we’re off to another pub.”

Our next port of call was the Black Horse where I introduced William to the tenant.

“This is Reg, landlord of this fine establishment. He made £15,000 pounds in 2011; he’s on track to make considerably less this year.

Think about that William; £15,000! That’s pretty much on par with your weekly expenses allowance, isn’t it?”

“Err….yes well I do rather a lot of travelling.”

“I’m sure you do; particularly if you’re not sure which of your houses you’re actually supposed to be living in.

Anyway, that’s of no concern to us today. £15,000 for an eighty hour week, 52 weeks of the year. Reg here can only dream about minimum wage.”

“My god Reg” said William, “have you not approached your pubco about this?”

“Yes. I went along to my pubco’s HQ last week and spoke with my BDM.”

“What exactly did you say to him?”

“I asked him for a fairer deal.”

“What was his response?”

“Take a look at this. It’s a transcript of the meeting.”

‘Please sir, I want some more.’

The master was a fat, healthy man; but he turned very pale. He gazed in stupified astonishment on the small rebel for some seconds, and then clung for support to the copper. The assistants were paralysed with wonder; the boys with fear.

‘What!’ said the master at length, in a faint voice.

‘Please, sir,’ replied Reg, ‘I want some more’.

The master aimed a blow at Reg’s head with the ladle; pinioned him in his arms and shrieked aloud for the beadle.

The board were sitting in solemn conclave, when Mr Bumble rushed into the room in great excitement, and addressing the gentlemen in a high chair said,

‘Mr Limbkins, I beg your pardon, sir. A tenant has asked for more!’

There was a general start. Horror was depicted on every countenance.

‘For MORE!’ said Mr. Limbkins. ‘Compose yourself Bumble, and answer me distinctly. Do I understand that he asked for more, after he had eaten the supper allotted by the dietary?’

‘He did sir,’ replied Bumble

‘That boy will be hung,’ said the gentleman in the white waistcoat. ‘I know that boy will be hung.’

Once William had finished reading he put the papers on the table and turned to Reg.”

“What happened then?”

“I was referred to the COP. Page 4 lays out the pubco’s obligations with regard to countervailing benefits. It says, and I quote:

‘With this view, they contracted with the waterworks to lay on an unlimited supply of water, and with a corn-factor to supply periodically small quantities of oatmeal, and issued three meals of thin gruel a day, with an onion twice a week and half a roll on Sundays.’

My BDM says the pubco has provided this service so I don’t have a leg to stand on. But that simply isn’t the case.

I haven’t seen any onions in months and when I phoned the help desk to ask for my gruel allowance they informed me there was no money available.

There are many more out there like me William. Is this your idea of the Big Society? One where the fat cats get fatter while the rest of us scavenge for morsels; toiling till we drop!

I suggest you go back to Westminster and tell your ‘right honourable friends’ to think again. Make it clear that, thanks to them, business continues as usual at the Dickensian workhouse.

Now then, whilst you’re here; are you going to make yourself useful and pull a few pints?”

 

 

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

Freedom2choose Newsletter, always an interesting read for smokers and non smokers

Freedom2choose Newsletter


March Newsletter

Posted: 13 Mar 2012 05:00 PM PDT

March newsletter

From the Chairman

It has been a very busy for myself in the last four weeks. I have been interviewed on the BBC twice and had my article in The Commentator. I also got a call from BBC Radio Humberside looking for a lady smoker, and if you look at Patsy Nurse’s blog she was not off the airwave for a couple of days. SmokeFree North East lady slammed the phone down. Also we have a new writer for Freedom2Choose but more will be revealed soon. I hope as well you are supporting Forest in their “Hands Off Our Packs” Campaign too.
I have been Chairman of F2C for about 4 months now and can I thank our wonderful Executive and you our members for all your unpaid and crucial work. I know ASH and the anti smokers read our blog and website and are a constant menace to them. Keep the good work up. Dave Atherton
Anything but ‘Plain’ Packaging

Pre-launch campaigning heats up as the Government’s consultation on so-called ‘plain’ packaging draws near.
The Scotsman gives us a good example of the scale of the debate between supporters and opponents of the measure. Beginning with a piece on Chris Snowdon’s report for the Adam Smith Institute on February 20th, there appears, the next day, ASH Scotland Sheila Duffy’s responding letter. By the 22nd, the Scotsman has announced the winner by way of an article under the alarmist heading: 430 children start smoking cigarettes every day in UK.
This more or less describes the sequence – and speed – of the ‘debate’ as reported in last month’s press.
Chris begins by explaining that the packs we are being taught to call ‘plain’ will be anything but. The gory images will grow to cover most of both sides of the packet, much like the ones being planned for Australian smokers.

Just plain misleading

Anti-smoking agencies don’t seem to have much of an argument to offer in return, so it’s back to the ad homs and the children. Deborah Arnott calls anyone who disagrees a ‘tobacco industry ally’ and smoking nine-year olds are spotted in Brighton and South Shields. Taken as a whole, it just goes to show that their anti-smoking measures are working, they say.
Pre-consultation campaigning is not being limited to the written word, however. Smokefree South West has posted roadside billboards urging people to join the ‘plain’ packet crusade – and there, on the billboard, is the picture of a perfectly plain packet of cigarettes.

How You Can Help

Alert the Advertising Standards Agency to the misleading information Smokefree South West is using on its billboards.
Sign the Forest Petition: Hands off our Packs.
Time to turn our attention to…
Described as a poison that is responsible for “illnesses including obesity, heart disease, cancer and liver problems…and contributes to 35million deaths a year worldwide”, sugar will soon be joining tobacco and alcohol on the tax-and-regulate list, if health lobbyists get their way.
Pugh in The Mail
Pub Trade

Pub closures data released by the Office of National Statistics prompt of flurry of alarmist headlines from around the country. The ONS figures cover the period 2002 – 2012. From these, an annual average is extrapolated, thus avoiding an accurate time-line of closures through the course of the decade – and masking the biggest culprit in the sudden decline of our pubs.
While Cambridge council is prepared to spend £19,000 on finding out why the city is losing its pubs, other bodies line up to offer their solutions. The BBPA, for example, is calling for a tax freeze. Independent brewers Wells and Youngs of Bradford reckon bringing VAT down to 15% from its current 20% would turn things around. Scunthorpe MP Nic Dakin blames the pubcos.
And for those publicans still hanging on in grim desperation, who are “literally tearing our hair out and we don’t know what to do to get people into the pubs”, Janet Street-Porter has the answer – alcohol-free bars. That should do the trick, Janet!
Tax and Smuggling

Trading Standards Officers have been trawling through the bins of Lincolnshire, collecting old fag packets. They have found that a lot people have grown tired of paying exorbitant taxes for a product that they are vilified for using. One in seven discarded packs were found to be either counterfeit or smuggled, although it does not explain how HMRC can tell the difference between smuggled tobacco and tobacco legally brought into the country by cross-border shoppers.
Japan Tobacco International reckons the domestic share of illicit tobacco is about a quarter of the total market for all tobacco products. This proportion rises to almost a third in Wales.
And in Europe, Switzerland comes under fire for a banking system and business privacy laws that allow the smugglers to flourish. Japan Tobacco International is said to be under investigation for its links to smuggling.

Things that are worse than the worst thing in the world.

According to the results of a recent Swedish study, “the effects of being exposed to high exhaust levels and ozone… has an even greater effect than smoking,” on the risk of having a premature baby.
Staying with air pollution, two studies published in the Archives of Internal Medicine, examine its role in the health of older woman. While one finds that incidences of stroke increase with episodes of high air pollution, the other suggests that prolonged exposure can speed up the rate of cognitive decline.

***

A full year after F2C brought you ‘The Loneliness Blogs’, the government’s Nudge Unit is now telling us that loneliness is worse than smoking. The Unit’s head behavioural meddler, David Halpern, says:
‘We know smoking is really bad for you, but much worse are things like social relationships.”
That would be those social relationships built up around our social lives, then David?
At first glance it would seem that Dr. Hilary Graham is having doubts about denormalisation, the policy that drives most anti-smoking campaigns and leads directly to feelings of stigmatisation and hence loneliness. However, and despite the headlines, her objections appear to be based on practicalities rather than ethics – you simply can’t ‘denormalise’ a segment of the population that is quite happy to live beyond the ‘normal’ middle-class values you are trying to shame them into. If she aware that it also creates people like PJ Wain, she makes no mention of it.

Creeping Bans

Denormalisation is the principle behind the rise of the Play-Park Ban. Wirral anti-smoking group, Heart of Mersey, is the latest to notch up a ‘localism’ victory when ‘voluntary bans’ were given the council go-ahead in three of the area’s parks.
The lobby group’s Jo McCullagh, explains:
“…the aim was to “denormalise” smoking so children were discouraged from taking up the habit in later years. Children learn their behaviour from adults and so it is essential tobacco use is not seen as part of everyday life in our communities.”
There being nowhere for adults to smoke indoors, Ms. McCullagh must be referring to the cleansing of our outdoor communities, beginning with community parks.
What makes these bans ‘voluntary’ is the inability of councils to enforce them. An army of municipal attendants will be trained to ‘remind’ people not to smoke, but they cannot force people to put out their cigarettes, nor can they issue fines or mete out summary punishment.
Meanwhile:
Tuesday 21st February: ASH Ireland “has called for a nationwide smoking ban in children’s playgrounds from Ash Wednesday.” Wednesday 22nd February: Ash Wednesday
Yes. You read that right. Such is the level of power that this minority interest group now wields, it has taken to snapping its fingers when barking orders. Says Spokesman Dr Brian Maurer, “The council can merely erect a sign asking people not to smoke.” In 24 hours.

***

The Welsh Assembly has launched its campaign for a voluntary ban on smoking in cars with children present. The ban will remain ‘voluntary’ right up to the point that ASH Wales persuades the Assembly that parents are still volunteering to ignore it, at which point it will be enforced.

Making us Stop

Having found that the NRT doesn’t work, anti-smoking groups are resorting to bribery. A priority target for enforced ‘quitting’ is pregnant women, who belong to a group with a relatively high smoking rate.
Scotland has already trialled ‘pay-by-results’ schemes in Dundee. Now it is Glasgow’s turn. Linda Bauld, who authored the infamous English Smoking Ban Review, is leading a study to compare ‘quit’ rates between one group on standard NHS stop-smoking treatment and a second on £400.
“We have very little to offer these people,” said the anti-smoking activist. Comparatively speaking, this is true; NHS Derbyshire is giving away £752 per ‘smoke-free’ pregnancy.

***

Public Health Wales has followed up January’s English report, ‘Making Every Contact Count’ with an identical report of its own. Doctors, dentists and other health workers are to badger people about their lifestyle habits, with a view to identifying ‘at risk’ patients. We are told by the report’s author, Dr. Julie Bishop, that, “research has shown that [these brief interventions]… can make a big difference”, a statement at odds with the cagey admission she also makes:
“We don’t tend to think that health professionals advising people to change is particularly effective, usually because we’ve been on the receiving end.”
Being an ‘expert’, Dr. Julie Bishop puts her faith in the research rather than the common sense she was born with.

Cross Border Shopping – Helping Each Other

“The vast majority of cross-border shoppers are oblivious to their rights and the tactics of UKBA until it’s too late! l’m asking you to help stop this.”
Our friends at Nothing2Declare have designed some handy information cards in pdf. format, easy to print off and hand out to fellow passengers. The cards summarise your legal rights as a cross-border shopper, and include useful tips for keeping safe through customs control.
By helping to spread the word, you will be playing a vital role in the fight to restore dignity to a now second-class citizen – the Smoker.

In the words of eighteenth century dramatist George Farquhar:
“Those who know the least obey the best.”
Freedom2choose: c/o John H Baker 22 Glastonbury House, Priestfields, Middlesbrough, Cleveland TS3 0LF Tel/Fax 0845 643 9469

Freedom2choose (Scotland): c/o Michael Dividson, 15, Linksview House, Leith, EH6 6DP Tel 0845 643 9552

Unscrupulous Landlords, Leases, IVA’s and Publicans Barrel-Dregs (237)

IVA’s and publicans

 

The word IVA has become very common these last few years as increasing numbers of people in debt have now got one. But what is it and how do I know if I need one and can it really be the best solution when trying to resolve my debts?

 

There are basically six ways to get out of debt and you need to choose one based on your circumstances:

 

1. Bankruptcy & DRO (Debt Relief Orders new for April 2009)

2. IVA

3. Family arrangement (often referred to as debt counselling & adjustment)

4. Sell something (house, car, possessions, yourself!)

5. Doing nothing / bury your head and leave it up to fate (very popular)

6. Savings (use them if you have any and make some if you don’t)

 

There is arguably a 7th but it is not applicable to all, in essence it’s chasing people who owe you money, your debtors no less! However this article is really concerned about IVA’s and how it applies to those running a pub on lease.

 

IVA stands for ‘Individual Voluntary Arrangement’ it’s a legal contract between you and your creditors. It’s designed to offer an alternative to bankruptcy; many people have been entering in to this kind of arrangement in order to draw a line under their debts and hopefully move on, in 2008 during the last 3 months some 10,344 people applied for an IVA. IVA’s typically offer your creditors get a % of the debt owed (on average it’s 35%) and you get 5 years to pay it to them, very attractive if you are drowning in debt. Assets such as houses / property are usually included and you may find yourself losing a large slice of the equity in your home after the 5 years is up, a nasty sting in the tail which some people with an IVA have no idea of.

 

For many years the IVA was mainly the choice of professional people who under bankruptcy would otherwise have lost their employment. The kind of jobs that needed protection from bankruptcy were accountants, lawyers, MP’s, police officers, members of the armed forces, directors of limited companies and trustees to name but a few.

 

So what about a publican with a lease, because it would seem if all the people listed above use them it must be ok, as a publican can’t go bankrupt either. It has come to light that financially stretched publicans are being advised to take out IVA’s by their accountants, bookkeepers and even their BRM’s No doubt some have even seen adverts in the press or on TV or even chatted with a well meaning customer over the bar about IVA’s

So it’s not surprising given all of the above you would consider an IVA.

 

But there is a very real danger that should you take out an IVA it can mean you have forfeited your lease and lost your business altogether. Entering in to an IVA can be a terminal event to a lease. Problems arise over not getting correct advice in the first place from the Insolvency Practitioner who sets up the IVA, it is essential you send an IP a copy of any lease you have for their opinion regardless as to whether you owe any money to them. This may come as a surprise because if you took a publican who didn’t owe any money to their brewery / freeholder you wouldn’t have to list them as a creditor on the IVA as you owe them nothing.

 

The situation surrounding IVA’s and the effect on a lease is so profound that anyone considering an IVA must get explicit written consent from the other parties to the lease that they will not forfeit you in the event of you taking on an IVA. There is also the effect on your license to consider as Section 27 of the Licensing Act 2003 provides that a Premises licenses lapses immediately if the holder enters into a voluntary arrangement with his creditors! Generally the publican is the affected party, although one major pubco at least has a policy of holding the licenses itself, which may overcome the licensing issue – but not necessarily the lease – problem. It would be disastrous to take out an IVA only to see you business taken away from you some time later, so prior to entering in to an IVA must give it very careful thought and planning. If any publican has already taken out an IVA you may be trading on borrowed time and have already lost all the value in your lease.

 

Anyone wanting a review of their debts or has any questions can contact Chris Wright of Twinpier on office 01825 830422 mobile 07502214457 or admin@twinpier.co.uk

Twinpier are specialists at helping people in the licensed trade, with confidential advice on debt and credit problems and with providing alternatives to Bankruptcy / IVA’s

Licensed by the consumer credit act 597380

 

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

 

MORGAN & CLARKE MARCH 2012 NEWSLETTER NO. 4 (Well worth reading)

MORGAN & CLARKE  MARCH 2012 NEWSLETTER NO. 4

Pigeon House, The Broadway,

Oakridge Lynch, Stroud, Glos. GL6 7NU

Email: info@morganandclarke.co.uk   Phone:  01285 719292

www.morganandclarke.co.uk

(Also at:  London, Cardiff, Matlock, Braunton, Lewes)

 

 

At the risk of being deeply cynical, the Team at M&C Chartered Surveyors have viewed with incredulity the recent actions of the Government, spurred on in part by BSC Chairman Adrian Bailey’s topic raised in the Prime Minister’s Questions on the 22nd February.  Adrian Bailey’s question to the PM was:

“The Government response to the unfair relationship between pub companies and their licensees so far has been self-regulation, not statutory regulation.  On January 12th (see M&C Newsletter passim) of this year, this House voted unanimously to set up a review panel to be agreed by the Business Select Committee to review the implementation of self-regulation.  To date there has been absolutely no response from the Government”.

 

David Cameron’s response was:

“I am a keen supporter of British pubs so I will write to the Honourable Gentleman and get him a good answer”.

 

Well, guess what, that good answer actually was.   Norman Lamb, the new Business Minister responsible for pubs, quickly responded as follows:

“Any review would simply be used as a vehicle to oppose the Government’s solution and others have made it very clear that they are implacably opposed to self-regulation and would only be satisfied by legislation.  The Government have now committed sufficiently far to the self-regulatory approach that to back track would prove difficult.   The Government’s decision not to legislate, relied heavily on the fact that the OFT had found in October 2010 that no competition issues affecting consumers existed in the pub market.  There was no good evidence that the beer tie (a principal target of campaigners) was causing pubs to close or harming consumer choice.   Finally, self-regulation could be introduced much more quickly than any statutory solution”.

 

So there we have it, no statutory regulation and the OFT Report was right all along.   It would seem that the seven years since the first BISC Hearing in 2004 have been a complete and utter waste of time.  It also makes you wonder how much this sticks in the throat of all those well meaning souls that have given evidence to the various BISC Hearings across the years, seeking a statutory form of regulation which, of course, included both David Morgan and Simon Clarke who gave evidence at various Hearings.

 

We now have to wait on the PICAS regulations and the apparent teeth in the industry’s self-appointed watchdog, namely the BII.   The future does not look bright, it looks an insipid shade of self-regulatory sepia.

 

BIIBAS

Correspondence has come to hand in the shape of an email from Mikayla Lettin at the BII addressed to Chris Lindesay at the Sun Inn, Dunsfold.  Quoting in part from that email of 24 February 2012, the following is quite illuminating as to what BIIBAS actually thinks its continuing role will be.

 “Chris – I wanted to advise you that BIIBAS is currently in the process of changing its complaint procedure.  Due to the imminent arrival of the PICA-Service, BIIBAS will be providing a shorter investigation process.  BIIBAS is still happy to receive complaints and advise licensees on whether there appears to be breach of the Code of Practice.  However, it will no longer be the task of the Steering Committee to determine whether a breach has occurred or not.  This will be the role of the PICA-Service who will hear the cases and determine whether a breach of the Code of Practice has occurred.  The PICA-Service in return will report back to BIIBAS so that we can continue to monitor compliance with the Code of Practice as the accreditation body.  However, after several BISC reports into pub companies and the Government’s response, BIIBAS is to remain in the position as the benchmarking and accreditation service who will provide preliminary advice to Licensees of breaches of the Code of Practice but will then, refer them to the PICA-Service for the dispute to be resolved.” (Emphasis added)

 

Coming from the very heart of the “policeman of the industry”, the BII, we are sure that the comments will give you all complete reassurance.

 

PICAS (or rather PICA – Service as it is now being styled!)

On a lighter note, did you know that PICAS stands for the following five definitions:-

  • Humane, non-lethal method of bird control
  • Royalty-free Vector icons and symbols
  • More than one abnormal craving or appetite for non-food substances such as clay, paint or nutty slack coal!
  • A printer’s unit of type size equal to about twelve points or one-sixth of an inch.
  • Property in Cyprus Action Support

It seems that the PICAS Regulations (linked to their as yet to be launched website) will have a little bit of competition!

 

Would you Adam & Eve it?

We have been banging on for some long time about the quite illegal practice of requiring an Energy Performance Certificate in a Terminal Schedule of Dilapidations pending lease renewal.  A classic example of this was regarding the Plough Inn, Portishead when Tim Edwards, Enterprise Inns’ Regional Property Manager, in a Dilapidations Schedule dated 25th June 2010, item 17, required an Energy Efficiency Certificate, charged at £495.   We formally raised the issue and had a response from Kevin Phipps, Regional Property Manager which stated:

 “I can understand your confusion over this item because an EPC is not required for lease renewal, only when the tenant changes, so we will naturally not be requesting this item as a condition of the renewal and the costs will be removed from our schedule”.

 

So that’s all right then!   If we hadn’t raised the issue, the unsuspecting tenant would still have had this requirement as an element of the Dilapidations Schedule and still been required to pay for it.

 

Well, guess what, yet another lease renewal and yet another Dilapidations Schedule.  This time the Eagle & Sun, Droitwich and a Dilapidations Schedule undertaken by Linda Cresswell of Enterprise Inns on the 18th May 2011.   Item 21, Energy Performance Certificate – cost again £495.

 

And finally, questioning Peter Cole of Enterprise Inns at the Laurie Arms, Hammersmith the other week, as to why the Terminal Schedule of Dilapidations, yet again, included an Energy Performance Certificate requirement (again, cost £495), he confirmed “we include the Energy Performance Certificate requirement on each and every Dilapidations’ Schedule with no exception.  We’ve been ordered to do it.”

 

I think we have now made our point concerning EPC’s and will move on to other things.

 

You have been warned!

 

BRULINES

News comes to us of a quite intriguing letter from Rob Crewe, Lead Trading Standards Practitioner (Metrology) of Cheshire West and Cheshire Council Trading Standards to Carole Boyle of The Oddfellows, Davenham, Northwich, Cheshire dated 2 March 2012.  Quite a lengthy letter with an interesting set of observations in the middle of it from which we quote:-

 “Unfortunately, without evidence of the equipment being used to determine the quantity of the fine, we do not believe that we can take any formal action against Punch Taverns.  We will continue to liaise with the Home Authority regarding the issue as a whole.  In the meantime, any recovery of the fines paid must be initiated by yourself.  The Weights and Measures Act does not contain any civil recompense provisions.  If we took formal action through the Criminal Courts, they may be able to award compensation but this is not a given……..this service has a policy of only offering mediation and assistance for Court action if the claim is within the Small Claims’ court limit and there is a consumer/trader dispute.” (Our underlining).

 

Firstly, the Small Claims’ limit is currently £5,000 although the Ministry of Justice currently wants to increase the threshold up to £15,000 although that has yet to be confirmed in legislation.  The original £5,000 level was set in year 2000.

 

It would seem from Rob Crewe’s letter that if you are “fined” for an alleged transgression of your supply tie, you MUST get confirmation as to how the fine has been calculated and that there has been reliance placed upon your Brulines equipment.  You then satisfy the evidence requirement that Brulines has been used in the determination of the quantity of the fine.  That then brings the whole affair squarely into “use in trade”.

 

Late Night Levy (or money for old rope)

We are sure that by now you will have heard of the intended late night levy (LNL).   Local authorities will now empower Licensing Departments to enforce the LNL to raise a contribution from those alcohol retailers that are open from midnight to 6.00 a.m.   We have a number of concerned clients who operate up to 2.00 a.m. quite profitably, generally in smaller town centres.   The strong likelihood is that they will now have to shut their trading operations at midnight as the economics of continuing with an LNL is somewhat daunting.  It is accepted, however, that there is a fee banding which regulates that the annual fee in band E (prime city centre) is £4,440, falling to Band A (sole outlet in a small village) at £299.   It would seem from early investigation that our clients are probably in Band B or C which would mean a fee of between £3,500 up to £4,000 p.a.   It is thought likely that the LNL will be water off a duck’s back to supermarkets who will gaily continue selling alcohol at pocket money prices well into the wee small hours.

 

A Record?

The Rent Review Memorandum has just been signed with Enterprise Inns in respect of the Old Crown Inn, Hillsborough, Sheffield.  David Morgan provided detailed rental valuation advice to Claire Bidwell, the lessee, after undertaking our now famous initial free of charge Strength of Case Review.  The report was exchanged with Enterprise Inns who then sent in their own “Independent Expert”.  The original rent was £58,046 which Enterprise Inns in April 2011 generously intended to reduce to £54,000.  The eventual rent was settled at £30,000 which is a reduction of almost 50%.  Claire Bidwell undertook all of the direct negotiations with Enterprise Inns having had the full “script” contained in our detailed Report.

 

Claire said the other day “I really would never have achieved anything like the settlement if I hadn’t had your Report.  I really am very, very grateful and will be recommending your services to everyone that I know in the trade.”

 

Congratulations – Claire, we were more than pleased to be of assistance.

 

And finally

There was a recent rent settlement of a long outstanding rent review at the Granville Arms, Barford, nr Warwick.  The following is a direct quote from the Tenant, Val Kersey’s email to us:-

 “FANTASTIC RESULT!  What can I say – thank you so much.  You have done an absolutely brilliant job and I couldn’t have asked for more.  I will certainly be recommending your services to everyone and anyone.  I have now stopped dancing around the office and punching the air.  Just settled down with a glass of champagne…..it’s made my weekend!”

 

 

Best Wishes

The Team at M & C

Email:  info@morganandclarke.co.uk

Phone: 01285 719292