Monthly Archives: September 2013

A good article by Roger Protz on the realities of Pub Co’s (Barrel-Dregs 265)

Pubcos drinking in Last Chance Saloon by Roger Protz

Added: Saturday, September 28th 2013

Pubs are falling as fast as the autumn leaves, at a rate of 26 a week, ripping the hearts out of local communities. We await the response by Business Secretary Vince Cable to the demand by publicans and consumers for tough action to tackle the giant national pub companies whose activities – in no small measure – are responsible for many pub closures.Will we be fobbed off yet again – told that a “free market” is working well, that competition ensures there are many companies, large and small, running pubs, and no action is needed? If so, Dr Cable and his parliamentary colleagues should leave the cloisters of Westminster and walk round the streets of a few towns and cities. They will see at first hand the boarded-up pubs or the smart new houses that have replaced perfectly viable hostelries.

People go to pubs to do far more than drink. They meet friends and they enjoy a meal. They offer solace to the lonely. With energy prices in the headlines, pubs offer warmth to those who struggle to heat their homes.

Pubs are often part of the history and culture of British society. In St Albans, where I live, the Boot and the Old Fighting Cocks are two of the oldest inns in England and are rich in history and folk lore.

And pubs also make an important contribution to the economies of their communities. They inject an average of £80,000 each into their communities every year.

The reasons for pub closures are complex. A lot of attention has been given – rightly – to the grossly unfair competition from supermarkets that sell beer so heavily discounted that the prices are sometimes less than the cost of production. But less notice has been given to the role of giant pub-owning companies that close perfectly viable pubs in order to profit from their sale to property companies.

The pattern of pub-owning in Britain has changed out of all recognition in the past few decades. Pubs used to be owned in the main by breweries. But government action in the early 1990s followed a Monopolies Commission report that showed that the large national brewers acted as a cartel, fixing prices and charging far more for beer than smaller competitors.

As a result of sweeping changes brought in by the government of the day, most of the big brewers sold their pub estates to new pub-owning companies, known as “pubcos” for short.

A devastating report published at the end of September by the Fair Deal for Your Local Campaign reveales the full horror of the grip of Britain’s pubs by the two biggest pubcos, Enterprise Inns and Punch Taverns. Fair Deal for Your Local is run by publicans with the full backing of CAMRA, the Campaign for Real Ale, the Parliamentary Save the Pub Group and the GMB trade union.

The report says: “Figures over the last four years expose the calamitous reality of the pubco business model, with a staggering third of pubs owned by the two largest pubcos being sold off in just four years.”

It goes on to say that Enterprise and Punch have between them disposed of more than 5,000 pubs between 2008 and 2012 – that’s 33% of their outlets. In 2008 Enterprise owned 7,763 pubs. By 2012 this figure had fallen to 5,720.In 2008 Punch owned 7,560 and that number had declined to just 4,529 pubs by 2012.

The reason for this catastrophic state of affairs has nothing to do with people no longer drinking in pubs. In many cases, perfectly viable and profitable pubs have been sold as a result of the crazy way in which the pubcos are run.

The Fair Deal report accuses the two companies of “slash and burn” tactics. “They have been asset stripping in a desperate attempt to pay off the extraordinary level of debt they are in. This debt accumulated after a period of reckless empire building, over-evaluation of their estates and over-borrowing against that value.”

To emphasise the point, the report adds that in 2012 Enterprise had a net cash flow from its pubs of £296 million but in same year its debt and interest payments totalled £430 million. As a result of this £134 million shortfall, the company has resorted to selling off pubs, regardless of the interests of pubgoers and their communities.

The pubcos “business model” sometimes appears to be have been lifted from the Theatre of the Absurd. In Ipswich, Enterprise declared the Dove pub to be “unviable” and planned to close it. The sitting tenants, Ady Smith and Karen Beaumont, were able to raise the cash to buy the Dove and prove the pubco wrong. The pub has thrived ever since. It sells a wide range of cask beers, mainly from local independent breweries, and a large marquee has been added at the back to house regular beer festivals. Ady and Karen have now installed an in-house micro-plant to produce their own beer in order to give even greater choice to their legion of customers. The Dove, without question, is now the most popular and successful pub in Ipswich.

In the village of Sandridge in Hertfordshire, Enterprise leased the Rose & Crown to the small pub company Oak Taverns. Oak specialises in running pubs that offer a wide choice of local ales along with good food. The Rose & Crown thrived but Enterprise rained on the parade by tripling the rent. As a result Oak Taverns couldn’t make a living from the pub and pulled out.

The rent burden is at the heart of the Fair Deal for Your Local’s submission to the Business and Enterprise Department’s investigation of the pubcos. It urges Vince Cable to bring in a Statutory Code for the pubcos, as self-regulation has all too clearly failed. Fair Deal wants independent arbitration to fix fair rents for licensees and it also wants a provision for a “free of tie” rent that would enable publicans to source beers from other suppliers. Most pubco licensees are tied to the pubco beer list and as a result are not able to the range of beers demanded by consumers.

Will the Business and Enterprise Secretary listen and act? A cable can be a lifeline…

Note:- The Cat & Fiddle in Hatfield, Herts. It was the closest pub to the giant Galleria shopping complex but it closed earlier this year and is now a group of flats and houses.

www.fairdealforyourlocal.com

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

Gambling – Proposed amendments to licence & e-cigarettes – an industry view

Gambling – Proposed amendments to licence conditions and codes of practice for all operators (LCCP)

Posted: 19 Sep 2013 05:00 PM PDT

The Gambling Commission have issued a consultation document relating to proposed changes to the LCCP.

The changes, designed to enhance consumer protection and improve gambling regulation, are set out in proposed amendments to the Licence Conditions and Codes of Practice and proposals for the protection of customer funds.

The majority of the amendments will affect gambling via websites or phones albeit there are a number of improvements – including some aspects of the proposals relating to protecting customer funds – that will affect premises-based gambling operators.

The areas for change include;

  • the handing of complaints & disputes
  • Better cooperation with the Commission
  • To embed the licensing objectives into LCCP’.
  • Make everyone aware of potential future changes
  • Clarify primary activity and the use of EBT’s in LBO’s
  • Alignment with Anti Money Laundering Regulations

The full consultation document can be found clicking here.

The closing date for the consultation process is December 4th 2013, with a 2014 implementation. However, the majority of changes are expected to be implemented at the earliest in April 2014.

It should also be noted that the Commission will also be hosting two formal workshops at its office in Birmingham on the 18th October (for the non-remote sector) and 25 October (remote) in order to discuss the proposals set out in the consultations.

We shall of course keep you updated as to any developments.

e-cigarettes – the industry view?

Posted: 19 Sep 2013 05:00 PM PDT

E-cigarettes – they seem to be increasing in popularity. Indeed two ‘e-bacconists’ have recent opening within 500 yards of our office. What is the industry view? Does your company have a policy as to whether they can be used in your premises? There does not appear to be a consistent approach but we are seeking to conduct an informal survey to establish what that approach may be. If you have a view and share them with us, we will let you have a copy of the findings. It will be anonymous, in that we will not identify individual companies.

One national operator – JDW – who apparently has a complete ban on their use, attracted some publicity over this earlier in the year. Their view was that it was or may be difficult for staff to distinguish between an actual cigarette (which obviously must not be smoked on the premises) with its e-cigarette alternative.

The options would appear to be:

  1. Your company has no policy on e-cigarettes
  2. Your company has a policy and is content for them to be used (or is it smoked!) on your licensed premises
  3. Your company has a policy and e-cigarettes are not allowed to be used on your licensed premises
  4. Your company leave the matter to the discretion of individual premises operators/managers
  5. You have not yet considered the position
  6. This is not a matter of interest or concern to you
  7. Other – please specify

An A/B/C/D/E/F/G (with comment will suffice) as a reply.

Please email us at johng@john-gaunt.co.uk with ‘E-cigarettes – the industry view’ in the subject matter.

Many thanks.

Thoughts on Underage and Binge Drinking, a hot topic.

Underage and Binge Drinking

The Government and Police Chiefs (ACPO) say they are committed to stopping Binge Drinking and Underage Drinking, with all their costly and ensuing problems.

They now claim that the great change in licensing hours has been a disaster and are having frantic meetings to find a solution to all these connected problems.

The last fifteen years have seen so many changes in the industry for the worse, many created by Local Authorities giving Full On licenses to premises where there are far too many already, without justifying a need, as it used to be.

This in turn creating a competitive battle for the lowest priced alcohol on the street to maintain sales and they wonder why they have far too many drunks causing chaos for the Police and A & E Departments.

Pub Co’s  giving the minimum training to totally inexperienced people to induce them to take leases with draconian, if not impossible trading conditions.

Those of us that have had licenses for years, despair at the naivety of some of the new Local Authority Licensing Supremos, having listened to their proposals and presentations, many with little or no experience or an in depth knowledge of the industry.

When questioned why the job spec excluded people who had held licenses, several stated that they did not require ex licensees, in their view Poachers turned Gamekeepers were not required, several local licensing officers later sought my opinion on a number of issues.

With that sort of background it is no wonder that we have problems, the system worked for years with the majority of Magistrates and Police doing a very good job, the industry withstood every recession and being a licensee was a career for life, which it may be for a few, but not for the majority in its present form.

I have had calls from several high profile people in the industry asking my views and support in bringing back a move to professionalism within the industry, which I totally agree.

This does not suit Local Licensing Authorities, who have been selling licenses like ice creams on a hot day, a one day course and you have a licence that means you can run a pub with no further training, a complex business with serious legal and moral responsibilities.

When the licensing act was changed Local Authorities were making noises about a greater level of professionalism to obtain a licence, this was instantly forgotten when they realised selling licenses to any Tom, Dick or Harry with minimal training was a serious long term Cash Cow and now we are paying for this collective stupidity.

The local Police Commissioner on being elected,  said that he was committed to stopping Binge Drinking.

I duly sent him an email suggesting that he should think outside the conventional box and received a polite response, thanking me for my comments, end of story.

Some considerable time later, I received an unusual email, among many and was about to delete it, in stead opened it, asking me if I would like to meet the new Police Commissioner for a 20 minute chat locally, which I accepted.

I met him and pointed out that my interest was licensing and his problem with Binge Drinking etc., pointing out the following.

Before the licensing went from the Magistrates to the Local Authorities any licensee putting a troublesome drunk on the street would have had his collar felt by the local police and his licence would have been at risk, when it came up for renewal if this was repeated more than twice during the year.

Now large corporates have revolving licensees and local authorities are terrified to remove their premises licenses for fear of costly legal appeals as with planning appeals where local authorities have lost hundreds of thousands of pounds defending their decisions.

Previously if you let a drunk into your pub you were responsible for them, if you let an apparent sober person into your pub and one drink sent them over the edge, you were responsible for them, now you put them on the street as fast as possible and let someone else deal with it.

This is not being a responsible Licensee.

This has to stop, anyone, including the DPS and door keepers, if they have them, are wholly responsible for dealing with these people and removing them to their place of origin or sobering them up, the only exception is violence, when the Police should be called, if the door keepers cannot handle them.

Every at risk establishment should have CCTV coverage for people entering, using and leaving with identifiable images and as such full accountability for the activities within their premises.

Places with any sort of history of trouble, should be ordered to install identifiable CCTV.

All licensees should have continual on going classified training including all their legal and moral responsibilities, we have to bring back full professionalism and a totally responsible attitude towards the handling of customers, before entering their premises, whilst on their premises and leaving their premises in a fit state, with full accountability should they cause problems.

This approach has long gone in town and city centres, personal licenses and premises licenses should be removed permanently with substantial fines, corporates would soon clean their acts up if the premises licence was removed.

By having good responsible licensees and doorkeepers, who accept their responsibilities, the police and A & E Departments should be able to revert to their main occupations and not waste their valuable time and funds dealing with drunks.

We have a culture of under age drinking, which ultimately fuels the continuing growth of Binge Drinking.

If all off sales were only allowed for people over 21, as in many other countries, this would be a step forward.

An 18 year old is still at school or just left, he is a peer to 15-17 year olds and still relates to them and therefore is the most likely source of supplying alcohol to underage drinkers.

At 21, they are at University or working and mixing with more adult people and far less likely to even consider buying alcohol for underage drinkers.

18-21 year olds can drink in pubs in a controlled environment perfectly legally, which is the way it should be.

These views are confirmed by a number of retail outlets.

In Newbury, the Police have suggested that selling individual bottles and cans of beer or cider be stopped and only sell large packs of these products, I am informed that less young people are buying packs, because of the obvious cost and the results look promising.

Despite the enthusiasm to stop Binge Drinking and Underage Drinking, the Government is unlikely to raise the age of Off Sales to 21 because of offending young voters, the pwerful Supermarket lobby would also not be happy, despite their claims to being squeaky clean in their sales to Underage Drinkers.

But if the Police and Government wish to slow down Underage and Binge Drinking they need to conside these options.

To conclude, the Police Commissioner said that I was the first person that had put forward any proposals that made any form of sense.

Unfortunately there is a powerful lobby within the industry, that wish to avoid too much control that might increase their responsibilities and affect their licensed properties and ultimate alcohol sales.

If you agree with my thoughts, send this to your local Police Chief or MP.

Barfly

 

 

 

Vagaries of Arbitration and the need for a switched-on Stocktaker and Surveyor (Barrel-dregs 264)

 

The Vagaries of Arbitration, and the need for a switched-on Stocktaker and Surveyor acting for you.

 

Arbitration should be a logical resolution to any dispute, sadly with rental disputes it would appear not, from a recent case.

 It is assumed that the Arbitrator is totally knowledgeable on all aspects of the subject in dispute.

 With Pub Rent Reviews, it would again appear not.   It is alleged that we have three apparent factions of RICS Arbitrators.

  1. A Surveyor who has dealt mainly with Pub Co’s as major clients:

he is not going to bite the hand that feeds him, since the majority of Pub Co’s view of rent reviews is to take the broadest interpretation of the situation that suits its best financial interests, which is pretty well corporate policy across the board.

  1. A Surveyor who deals solely with tenants and lessees:

there are very few, since corporate fees are far greater and are more likely to get paid, if losing at arbitration.

  1. A Surveyor who has little, if any, practical knowledge of either:

therefore he has no knowledge of the manipulation of RICS guidance notes and Industry Benchmarking that now exist. 

A frightening scenario for those that have, little or no understanding of the subject and have a rent review pending.

The recent case that landed in my lap was a serious example of an Arbitrator in Category 3.

Reasonably high profile in the commercial property market:  sadly not a regular pub rent review man.

The Protagonists were a Pub Co. and a lessee of rare talent and ability, running an excellent business.

The rent had been agreed at an acceptable level for a Competent Operator, after much negotiation, at the last review some three years previously.

The lessee had spent a substantial amount of his own money on upgrading various parts of the building, backed by a commercial repayment loan against the remaining years of a ten year lease.

First disaster – the Arbitrator would only allow the interest to be factored in to the rental calculations on a simple interest, no repayment basis (not the whole loan repayment), bearing in mind that the enhanced value of the property is to the Pub Co’s benefit as the freehold owner, at no cost to themselves. 

Being a very smart operator and enjoying the benefits of a much enhanced business, the turnover was about 40% higher than guesstimated for a Competent Operator, likewise his overheads and staff wage bill. 

The Arbitrator in his wisdom, or lack of wisdom, decided (in spite of many arguments to the contrary), to ignore the facts and use the Industry Benchmarking Figures, reduced by 2%.  Another complete disaster, setting the rent with an 85% increase on the last rent review three years ago. 

The Industry Benchmarking figures are, I am reliably informed, up to two years out-of-date, but set for a property purpose-built for providing food and drink.   Fine you might think. 

As any licensee knows, the majority of pubs were originally built to sell beer, not quality food.   From the late sixties onwards, the ones that were built were designed to sell food and alcohol:  consequently the supply of both were given great consideration as to the most economic way of achieving this – we hope.

Having owned a number of pubs, my wages bill fluctuated substantially depending on the layout of the kitchens – kitchens upstairs, kitchens downstairs – bars, proximity of beer cellars, snack food, restaurant food, tourist areas, town centres, community locations, the permutations are endless.

Yet this Arbitrator appeared to apply one set of Benchmarking, knowing absolutely nothing about the vagaries of running a pub, apart from leaning on the bar in his local, possibly unlikely.   He also seems to have swallowed the Pub Co. valuer’s version of the RICS guidance notes.  Another disaster!

My first lesson in a pub was watching a barmaid take a food and drinks order at the bar.  By the time she had run to the kitchen with the order, she could have served five customers.

From then on, a separate member of staff took orders in the bar, not behind it.   Customers were served quickly and the whole operation worked like clockwork. That was a specific arrangement to my pub, not some Benchmarking “average wage bill”.

If your kitchen is upstairs, it’s a nightmare, even with a dumb waiter your staff costs immediately escalate.   Not a factor the Benchmarking is capable of recognising.

If the staff have to run down any form of corridor from a kitchen – another nightmare!   The list is endless and costly staff-wise.

The kitchen should back onto the main eating area, ideally with two doors.

The beer cellar should back onto the main bar, not forty yards away through a succession of locked doors, which many are, as with food there are many permutations.

You cannot simplify costs to a set of numbers based on an ideal situation.  You need a good, switched-on Stocktaker who understands the vagaries of your individual system and can advise you if you have a lease or a tenancy.   Likewise, a freehouse, though you are not subjected to the rigours of justifying your wage bill with a genuine freehouse.

The Stocktaker should, in the case of arbitration, be able to justify your wages and overheads to an Arbitrator.  The Stocktaker is a specialist.   He understands the vagaries of the operational costs of buildings that were designed to sell beer and not food as we know it today, with all the legislation.

The alterations to an aged establishment required to meet the needs of supplying food, drinks in a modern day, and accommodation if available. 

The legislation from the EHO, Fire and HSE can be draconian to say the least in a quaint building of dubious age, as any experienced operator will tell you, the Roses round the Door count for nothing in the cost of wages and overheads.

Every pub is different, the business are different, the layouts are different and far too many are non user-friendly, despite our best efforts to make them so.   Every pub is a compromise, unless purpose-built and even that will have problems.

Arbitration should be a realistic consideration of the facts specific to the pub under scrutiny, not a guesstimation that will destroy a good operator.

Exasperated Potboy.

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.

September Smoking update, an interesting read that may cause some debate.

 Margaret Chan’s speech, against smoking world wide

Thursday, 12 September 2013

Not just the “end game” but poverty!

Bear with me on this, as this is Margaret Chan’s speech to the selected few in India regarding tobacco control-and the end of tobacco as a legal plant growing in a field.

Smoking Bans KILL businesses- FACT !

WHO Director-General considers the tobacco endgame

Dr Margaret Chan Director-General of the World Health Organization

Please note: Chan’s speech in ordinary black type : My notes & remarks coloured.
Keynote address at the International Conference on Public Health Priorities in the 21st Century: the Endgame for Tobacco New Delhi, India 11 September 2013

Excellencies, honourable ministers, distinguished scientists, representatives of civil society, ladies and gentlemen, I thank the government of India for hosting this International Conference on Public Health Priorities in the 21st Century, with its intriguing sub-title: the endgame for tobacco. WHO is proud to be the technical co-sponsor of this event. Public health has very few opportunities to end threats to health in a definitive way. Most of our work is never-ending. Every new wave of babies needs to be immunized. Bednets wear out. Mainstay medicines develop resistance. One generation learns the importance of safe sex. The next generation forgets. Disease eradication is one clear opportunity for a definitive end to a health threat. A tobacco endgame is another. Both have tremendous appeal. They promise to improve the world in a permanent way, offering every future generation the perpetual gift of freedom from major diseases. (Wrong-if ‘major diseases’, ie, malaria, TB, smallpox etc [other than tobacco addiction] are not eradicated then they will continue and will always be health threats!) [nb: Tobacco is NOT a disease-it is a naturally growing plant that an awful lt of people take a great deal of pleasure in smoking in one form or another!]

Speculation about a possible endgame for tobacco has been going on for at least a decade, often expressed as wishful what-if scenarios. For example, what if the tobacco industry simply did not exist? Tobacco use claimed an estimated 100 million lives during the previous century. (Yet again, mere estimations-junk science at its worst. No proper refs/citations such as this 100 million deaths from tobacco in the last century. Now- who did that study? [Mdme Calment, a smoker, lived to the age of 122, it must have been her that compiled these wondrous figures!] When? what were the variables? Measurement tests? Controls etc?? We all know (does she, Chan?) that deaths that might be related to tobacco in some way were not measured or even thought about before the second half of the century).
On current trends, tobacco use is projected to cause a billion deaths during the 21st century. Think of all the lives saved, the suffering avoided, and the costs averted if the tobacco industry simply ceased to exist.(PROJECTED! Think of a number and keep enlarging until it suits the purpose, that’s all this is. The WHO computer has had a serious overdose of noughts! Chan is now going from the sublime to the ridiculous as governments, especially ours, are extremely concerned with the escalating welfare costs as our generations have the audacity to live longer with 12,640 centenarians recorded 2 years ago! Chan also fails to elaborate on the fact that tobacco related treatments cost the NHS £2.7bn per annum yet revenue from tobacco is 4 x’s that amount. Chan also fails to introduce the fact that people that die earlier (pre 65 years of age) save governments fantastical amounts on money in pensions & a host of other care costs. Chan produces more & more of her fatuous statements as we go along.
Another argument goes like this. If all the harms caused by tobacco were known earlier on, tobacco products would never have been approved as safe for human consumption, could never have been marketed and sold like any other consumer product.“If all the harms were known….” – what Chan means is that if all the illnesses (most of which had never been heard of back then) could have been attributed to tobacco, then tobacco could have been banned immediately Sir Walter Raliegh brought the plant into favour here! So, by that reckoning, if it had been known that the motor car would easily accomplish 20-40-70-100mph and kill people it would never have been allowed to go faster than the man walking in front of it waving red flag!
Is it really too late to correct this grave historical error? Could tobacco use somehow be eliminated through a brave new plan that responds, retrospectively, to a great mistake? Meaning, can an ideology overcome something that is now enjoyed by countless billions of people worldwide?
This wishful thinking first took the form of a concrete proposal three years ago, when the journal Tobacco Control published a paper about “Imagining things otherwise: new endgame ideas for tobacco control”.
Concrete proposals expanded last year, when Tobacco Control issued a supplement devoted entirely to an exploration of tobacco endgames. Some striking proposals were put forward, as were some warnings and words of caution.
Ladies and gentlemen, Let me also offer some advice First, be very precise in your definition of what is meant by a tobacco endgame. We learned the importance of doing so when global goals were set for disease eradication or elimination. Progress towards any ambitious goal needs to be measured convincingly. Precise definitions help. ie, NOT the much favoured junk science which can enshrine any fanciful idea as a proven fact and should therefore be easily replicanble!
Second, anchor endgame strategies in impeccable science. About time methinks. Arguments for taking action need this water-tight support. Experience tells us that industry will challenge the science, distort the findings, or fund its own studies with a predictable bias. An impeccable scientific foundation is the best defence.Chan completely fails to mention that opposing forces have merely pointed out the truth of many of the skewed results, point out that many ‘studies’ are set up to produce the required results to suit their evil purposes. With it now proven that 80% of lung cancer are NOT attributable to smoking/smokers, Chan knows that their ersatz scientific scrabblings are falling well short of the mark!
Third, back up goals and strategies with solid feasibility studies. This is another lesson from the eradication experience. Totally honest scientific basis? this will probably be a first! Governments need to know what commitment to an ambitious goal really means in practical terms and what the likely pay-backs will be, for economies as well as societies. No, no, no Chan, you dare not go into the realms of costs & economies for the simple reason that the costs are astronomical-and this is where one of your great strategies comes completely unstuck because YOU have absolutely no idea what the cost is to each country and furthermore, you simp[ly don’t care! Good feasibility studies build confidence, and confidence inspires commitment.You simply cannot produce a reasonable economic nor socially based study for they go hand in hand. Destroy the social aspect of any community and you automatically start to destroy the economic aspect as well.
Fourth, recognize the diversity of factors that drive the tobacco epidemic in different economic and cultural contexts. These contexts also create their own unique barriers to success. A diversity of endgame strategies, as opposed to a single global strategy, might be needed to accommodate these different contexts. Provision of a menu of strategic and policy options might be another wise way forward. It doesn’t matter how you dress it up Chan, the more you try to eradicate tobacco the further into financial depression you will force each individual country. People are quite capable of growing and curing their own tobacco if they can be bothered-are you going to eradicate every single seed on the planet? “A diversity of endgame strategies… ” in other words, you want to devise a plan/strategy that you think you will get away with in each country-yes? And how are you going to compensate the 4 million people that depend on tobacco growth/sales in Zimbabwe, never mind every other tobacco producing nation?
Fifth, be realistic. Your scientific programmes will consider how the drive for sustainable development and concern about NCDs can bolster support for tobacco endgames. Doing so is promising, yet also faces some challenges.
Concern about NCDs creates a receptive environment for tobacco endgames. Time and time again, ministers of health from the developing world have told me that prevention of NCDs must be the cornerstone of their response. The costs and demands of chronic and acute care are beyond their reach. Prevention is the best option.More fatuous statements as we have already blown the costs department out of the water above!
My reply: full implementation of the WHO Framework Convention on Tobacco Control would deal the greatest single preventive blow to all of these diseases. Smoking is not a disease woman, cancer is a disease, diabetes is a disease, the common cold is a disease but none necessarily created through smoking!
A different situation exists in many wealthy countries, where effective control measures and changing social norms have seen smoking prevalence drop by 50% or more. In these countries, tobacco use is increasingly concentrated in sectors of society with lower levels of education, income, and engagement in the political process. In other words, the very success of tobacco control has reduced the visibility of smoking as a problem demanding urgent attention. In some cases, obesity is now the most visible epidemic that needs to be stopped. So why do you not concentrate on all the fat people-like Eire health Minister James Reilly who seems to be engrossed in tobacco control-probably in order that his own fat predicament doesn’t come under the spotlight!

Eire’s ‘healthy’ Bunteresque-James Reilly

Success is always good, but must not be allowed to conceal the fact that the job of tobacco control is far from done. Making tobacco endgames part of overarching development strategies has great policy appeal. In rapidly growing parts of Asia, evidence suggests that the huge costs of NCDs can cancel out the benefits of economic gain. A tobacco endgame makes very good sense as a boost to both health and economic development.So when, if Chan is correct and no tobacco intake = longevity, what answer has she for countries that can no longer afford to maintain rapidly increasing numbers of centenarians? And can the families of all those that die at (say) less than 80 yrs of age then sue Chan/WHO for that relative not having lived as long as here predicted?

But what are the realistic chances of success? None! people that enjoy smoking will continue to enjoy smoking-end of!
I see two main barriers to success. First, most of the proposed endgame strategies depend on a strong capacity for regulatory control and enforcement. Throughout much of the developing world, this capacity simply does not exist at present.And why should it? People do not want to give up smoking just the same as they don’t want to give up drinking or having sex or gardening – or all four at one! People are individuals, not robotic creations to be ruled by the likes of fanatics like you. Hitler was a fanatic and look what he did in his bunker-what are you going to do in yours?
Second, tobacco control requires cooperation from multiple sectors of government, from trade, finance, agriculture, education, law enforcement, and the judicial system. Unfortunately, many countries give more importance to tobacco as an issue for trade and commerce than as a severe threat to health. And this is exactly where your ideology falls flat because tobacco revenue is so great that countries cannot afford to terminate it on your say so. How can Zimbabwe put 4million people out of work because you say tobacco should be banned-does Paprika have the same selling power/financial impact as tobacco? I don’t think so. Are Venezuela likely to wipe out some 40% of their export income just because you want to rid the world of tobacco? I don’t think so. Do you seriously think that this country (a once great Britain) can afford to dismiss the £10-£11bn per year in revenue from tobacco? I don’t think so. You continuously bang on about the supposed health issues of tobacco but you never mention the health issues of poverty, chronic depression, social exclusions, loneliness, comfort eating, lack of social cohesion, isolation, inadequte housing, lack of employment opportunities or the other hundreds of things far more important than whether someone enjoys a cigarette/pipe or whatever. Great men such as Churchill smoked, Bertrand Russell smoked-both far cleverer people than you will ever be-except, probably, in the art of duplicity!
The tobacco industry ruthlessly exploits this appeal to commercial interests, everywhere. The most recent example concerns efforts on the part of Philip Morris to sabotage the vote on a strong European Directive on tobacco.And you ruthlessly exploit people’s fears! You never cease to employ the words “premature death”, but what is a premature death? there is no such thing in actuality as no one is born with a date stamp on their person. It is a figment, a term used by the medical world by which they can instil fear into people. A child that dies at (say) 7hours old is said to have died prematurely but how do you knowif that particular child was only meant to live for 7 hours? You don’t. You exploit the ‘possible’ dangers of tobacco yet never mention dire air pollution, much cused by the sheer volume of road traffic as you cannot be responsible for commerce to slow down or even cease. Strange also that you fail to mention that cancers have increased with industrialisation yet smoking rates have dramatically decreased since the late 1950’s! Now just why is that Chan? Industrialisation increases – cancers rapidly increase, yet smoking rates decreasing!
A massive army of lobbyists has been deployed to delay or block passage of the law until the European Council presidency moves to Greece, where the company has opened a huge hub for the production and distribution of cigarettes throughout Europe. Here, industry is counting on the historical pattern, where economic and commercial interests trump public health concerns time and time again. Such tactics give tobacco endgames further appeal as a strategy for putting industry out of business. They deserve it. Why do they deserve to be put out of business then? If people want to smoke they will smoke, simple as that-at least they are a bona fide` business whereas you most certainly are NOT! You are simply a collection of very fortunate people who are funded by every nation (to varying degrees depending on national wealth) to oversee health problems – not to sit in judgement over others who may choose to smoke, or have anal sex, or drink ten pints of beer per day, or cover themselves in tattoo’s, or, only wash on Sundays. These are all personal preferences and you are seriously interfering with people’s human rights; you are discriminating-which, apparently, is completely against EU law. And you have even managed to infiltrate legal systems to enforce your strategies, you can’t get much more evil than that! My last advice is this. Be careful.
As I said, nearly all endgame proposals require a very high level of legislative and regulatory support. In most cases, this support goes beyond the capacities needed to implement the WHO Framework Convention on Tobacco Control. Make sure that these proposals do not play straight into the hands of some long-standing and effective industry arguments, actually firing up the level of alarm. I am referring, in particular, to arguments that strong tobacco control measures represent interference of the Nanny State with personal liberties and freedom of choice.Which is exactly what they do! “Freedom of Choice” (?) That is a laugh because according to the ‘Law of Chan’, smokers should have no freedom of choice!
I am referring, too, to arguments that tobacco control interferes with trade and economic policies. Expect well-orchestrated, well-funded, and aggressive resistance every step along the way. The WHO tobacco treaty has certainly experienced this resistance throughout its history, beginning with its inception. And for a very good reason. It threatens industry profits. It is not all about the tobacco giants profits you silly, silly woman, it is more about the millions of jobs that rely on this humble plant. It’s about the world poverty she will create in her insistence on the eradication of tobacco, it’s about the complete disregard for people’s basic forms of enjoyment [their human rights], it’s about nations financial abilities to exist-such is the might, the power of the humble tobacco plant. Can the World Health Organisation compensate every country for its financial losses once this plant is eradicated and can the World Health Organisation guarantee that cancer will be eradicated too?
Endgame strategies threaten the very existence of the tobacco industry. Anticipate a strong back-lash, including through the use of litigation. Ladies and gentlemen, I have a final comment.Thank God for that! Some tobacco control advocates argue that the WHO Framework Convention on Tobacco Control has likely done all it can. Dramatic drops in tobacco use have begun to level off, pointing to the need for some radically different approaches. In other words, and here we go again, “we need more investment”
I cannot entirely agree with this view. The treaty has been in force for less than a decade. Abundant evidence has demonstrated the impact of its provisions. The evidence is particularly strong for demand-reduction measures, and the evidence holds true for countries at all levels of development. To help countries implement the treaty, WHO has developed a practical, cost-effective way to scale up implementation of its provisions on the ground. These are the six highly effective measures for demand reduction set out in MPOWER. A study published in the July issue of the Bulletin of the World Health Organization examined the impact on smoking-related deaths in 41 countries that adopted at least one highest-level MPOWER measure. In these countries, the estimated (yet again we rely on guesstimations!) number of smokers dropped by 14.8 million, averting a total of 7.4 million smoking-attributable deaths. (So are we to assume that 50% of the people who could have died, might or might not have been smokers-but it doesn’t seem to matter whether they actually were or not just so long as the word ‘attributable’ can be attached somewhere/somehow?)
This demonstrates the tremendous preventive impact of cost-effective measures for demand reduction. Actually, I think you’ll find that this “demonstrates the tremendous amount of playing about with figures we can perform to suit our cause!”
Many endgame proposals attack the supply side of the tobacco epidemic, aiming for its roots. Governments now have an expanded range of options to consider, some with a proven track record, others with visionary policy appeal. Keep in mind that tobacco endgames will face the same two barriers to implementation that the tobacco treaty has faced. Namely, interference by the tobacco industry and its lobbies, and lack of legislative and regulatory capacity.And don’t forget the ordinary people, you know the one’s, they are the ones that are sick of your interferences with their pleasures!
Ladies and gentlemen the death clock keeps ticking, and the numbers keep growing faster every minute. Clever wordage, but that doesn’t just apply to those who enjoy tobacco. Everyone is born to die, as you will one fine day and as I will on probably a rainy day. The human body is not built to last for all eternity but you make it sound as if it is. Perhaps you can explain why this lad suddenly dropped dead-fit as fiddle, non smoker, all the attributes of a budding centarian. Or this child who was born with cancer! Or perhaps you can explain the nine (9) members of one family who all died from various forms of cancer yet none of them ever smoked nor drank. Perhaps you can explain why all these non smoking human beings were ‘blessed’ with what you obviously determine as “the smokers disease”?
I understand, and share, the great sense of urgency, the impatience with the pace of progress, and the desire to seize the brave new promise of a tobacco endgame. The prospects for doing so are now being given the serious scientific scrutiny set out in the programme for this conference. I wish you every success. Thank you. Well at least it’s a blessing that the ‘scientific scrutiny’ is now going to be serious because what has been presented so far might as well have been written on toilet paper!
So there you have it folks, the opening speech from Margaret Chan who doesn’t really give a toss about your wealth, your employment prospects, your social life, your forms of enjoyment or much of anything else actually-just so long as you don’t smoke. And if you do happen to enjoy the odd drag or two then she simply wants to hound you into oblivion-by fair means or foul! Remember one thing in all that is spouted by Chan/WHO-tobacco is a naturally growing plant….. IT IS NOT A DISEASE as she would have you believe.

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

Howards, Chartered Accountants, September Tax Tips and News

 

September Tax Tips and News

To the latest edition of Tax Tips & News, our monthly newsletter designed to bring you tax tips and news to keep you one step ahead.

 

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

 

We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.

 

Please contact us for advice in your own specific circumstances. We’re here to help, email info@buyingapub.com for Howards contact details.

September 2013

· Resurfacing – Repairs or Capital?

· New ATED Charge

· VAT on Storage Change

· Pension Lifetime Allowance

· September Question and Answer Section

· September Key Tax Dates

 

Resurfacing – Repairs or Capital? top

Any business owner whose property includes a road, driveway, or parking area, will have to repair those surfaces at some point. The question is whether to charge the costs to ‘repairs’ or to ‘capital improvements’ in the accounts.

 

This decision has significant tax consequences, as the cost of repairs will qualify for a tax deduction, but capital improvements will not. Capital expenditure on improvements or renewals doesn’t get a tax deduction until the property is sold. Capital allowances can’t be claimed for the cost of laying roads or the structure of buildings, expect in rare cases where the facility is used for research and development.

 

Tax Inspectors frequently challenge the cost of repairs in business accounts, particularly where the sum expended in one year is large. The Inspector may argue that where a road is resurfaced, the work should be treated as a renewal (capital) and not a repair. However, following a number of tax cases on this issue HMRC has changed its official guidance to its Tax Inspectors. The new guidance states that where a road has been resurfaced, that amounts to a repair and not a renewal or a replacement, so the cost is tax allowable.

 

There are still many grey areas which can be argued to be one side of the capital/repairs line or the other. If you need a second opinion on the tax deductibility of your property expenses, please do ask us.

 

New ATED Charge top

The annual tax on enveloped dwellings (ATED) came into effect on 1 April 2013. This new tax applies to residential properties in the UK worth over £2 million, which are owned by a non-natural person, such as a company, trust or partnership that includes a company as a member.

 

The value of the residential property is measured as at 1 April 2012, not the purchase price.

 

Is your farmhouse owned by a farming partnership, which also has a company as a member? Does your company own properties which are used to house employees?

 

In both of those circumstances the property is potentially subject to the ATED charge if it is worth £2 million or more. The ATED charge ranges from £15,000 to £140,000 per year, and is payable by 31 October 2013 for 2013/14.

 

There are many exemptions and reliefs for ATED, including for farmhouses occupied by farmworkers, and for properties occupied by employees who don’t individually own more than 10% of the company. However, to claim the relevant exemption, the property owner needs to submit an ATED return to HMRC without delay.

 

The ATED return can be completed online on the HMRC website, and there is no need to register though the Government gateway. You can also download a paper version of the ATED return from the HMRC website. There is space on the ATED return to appoint us as your tax agent so we can then submit the return on your behalf. Note that the deadline for submitting the ATED return for 2013/14 is 1 October 2013.

 

VAT on Storage Change top

The law on whether VAT must be charged on storage facilities changed from 1 October 2012. Before that date if you let out space for storage to individuals or businesses, that service could be exempt from VAT, if you had not elected for the whole building to be subject to VAT (AKA: ‘opted to tax’). Since October 2012, if you are VAT registered, you generally need to charge VAT at 20% on the supply of storage areas.

 

The Taxman has recently confirmed in a new VAT information sheet (10/13) that any let space which is used for storage carries 20% VAT, not just the lock and leave facilities marketed as ‘self-storage’. This could affect businesses who let out unused parts of their buildings to others who use that space to store goods or materials. For example a farmer might let out surplus farm buildings on a temporary basis.

 

There are only a few exceptions to this new VAT rule. Those include where the space is let to a charity and it is not used for business purposes, and where the space is predominately used for an active purpose such as retail, and the storage is an ancillary activity.

 

It is the landlord’s responsibility to know how the let space is used and charge the relevant rate of VAT. If you have not charged VAT when you should have done for periods from 1 October 2012, you may need to correct this error in your next VAT return. We can advise you on the best way to do this.

 

Pension Lifetime Allowance top

The Government want us to save enough so we can each draw an adequate pension in retirement, but if you save too much you will be stung with a 55% tax charge when you draw your pension. The boundary between ‘enough’ and ‘too much’ savings is set in law by the lifetime allowance, which is a value of your total pension savings at retirement. This allowance will be reduced from £1.5 million to £1.25 million on 6 April 2014.

 

To give you a handle on these seemingly high numbers: an annual pension of £75,000 for a man aged 65 at retirement, today requires a pension fund of roughly £1.5 million. A pension fund of £1.25 million would deliver an annual pension of about £62,500 to the same person. If you contribute to a defined contribution pension scheme (the most common type), the value of your pension fund will be shown on your annual pension scheme statement.

 

If you are a member of a final salary pension scheme it will promise to pay you a pension equivalent to a percentage of your final salary. That could be as much as 2/3rds of your final salary. Work backwards from your current salary to get a rough idea of how much your pension fund may be worth. Your pension scheme trustees will be able to give you more accurate figures.

 

Once you have those figures, you can judge whether you need to elect to fix your lifetime allowance at its current level of £1.5 million, where your pension fund already exceeds £1.25 million. This is known as ‘fixed protection 2014’, and you need to apply to HMRC to do this before 6 April 2014.

 

Once fixed protection 2014 is obtained you won’t be able to make any further pension contributions to a registered pension scheme. If you are member of an occupational pension scheme which receives automatic contributions on your behalf, you will have to opt out of that scheme or lose the fixed protection.

 

After 6 April 2014 there will be another way of protecting your pension fund, called ‘individual protection 2014’. This will fix your lifetime allowance at the value of your pension rights as at 6 April 2014, up to a maximum of £1.5 million. You should discuss with your financial adviser which type of pension protection is best for you.

 

September Question and Answer Section top

Q. Please help, I’m so worried. I’ve received several threatening letters from the Taxman demanding money, but I’m sure I’m up to date with my tax payments. I’m terrified the bailiffs will turn up on my doorstep and demand payment. What should I do?

 

A. Let us see those nasty letters and we will try and sort the matter out for you with the Tax Office. In the meantime, keep this number to hand: 0300 200 3862. If bailiffs do turn up ask to see their photo ID cards, take a note of the ID numbers and call that number to confirm whether the bailiffs are genuine. Also collect evidence of the tax payments you have made recently, such as bank statements. These may be enough to prove to the bailiffs that you have paid the tax you owe.

 

Q. I need to get a high-end computer for my business which will cost about £2,200, but I use the VAT flat rate scheme for small businesses which doesn’t allow VAT reclaims. I’ve heard that I can claim back VAT charged on expensive items under the flat rate scheme, is that true?

 

A. Yes, under the flat rate scheme you can claim back VAT charged on the purchase of capital goods, which are items you will use in your business over a number of years. It must be a single purchase from one supplier with a VAT inclusive total of at least £2000, but that invoice can include several items bought together such as; screen, computer, and printer. The items must not be purchased for resale or for lease or hire.

 

Q. My company pays me the regular mileage rate of 45p per mile for business journeys I make in my own car. However, to reach certain customers I need to drive on mainland Europe which requires extra car insurance which is quite expensive. Can my company reimburse me for the cost of that extra insurance without any extra tax?

 

A. The regular mileage rate is supposed to cover all the marginal costs of using your personal car for business, including insurance. So if the company reimburses you for the extra cost of this insurance in addition to the mileage payment, that would be a taxable benefit in kind.

 

We need to look at the distances you are driving in Europe, and for what periods. If the time spent abroad is relatively short, it may be more economical for the company to hire a car for you while you are abroad. However, there is no substitute for crunching the numbers.

 

September Key Tax Dates top

19/22 – PAYE/NIC, and CIS deductions due for month to 5/9/2013

 

30 – Closing date to claim Small Business Rate Relief for 2012/13 in England

 

Need Help? top

New Clients Welcome top

Please contact us if we can help you with these or any other tax or accounts matters.

 

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list. If you are not already a client and are interested in becoming one, we would love to come to meet with you to discuss how we can help and provide you with a competitive quote for our services.

 

All new client consultations are provided free of charge and without obligation.

Government reveals consultation into Personal Licences

Government reveals consultation into Personal Licences

Posted: 11 Sep 2013 05:00 PM PDT

The Government has commenced a consultation on whether to abolish personal licences altogether. They had previously pledged to remove the requirement to renew (every 10 years) but seem to now have moved towards all out abolition.

This at first sight seems a positive move to reduce the burden on operators but as is often the case the devil is in the detail and the position in reality would bring new challenges. So in exchange for no personal licence as a check and balance as to those running licensed premises the proposal is to allow greater flexibility for licensing authorities to impose conditions on premises licences for staff to undergo training. This of course already exists and is used on occasions but it seems the government will encourage this “targeted” approach in appropriate cases, although there is also a suggestion in the consultation that criminal records checks could also be required in appropriate cases.

So the loosening of restrictions is only partial and in practice may result in more heavily conditioned licences. Plus, what guidance will be given as to “appropriate cases” or will the default position be criminal records checks by the police and all prospective DPS’s having to attend the police station to produce their qualification. Which for those who were around prior to 2005 all sounds very familiar.

Also in the consultation are the following proposals:

  1. Amend the mandatory conditions to require all alcohol sales to be authorised by the DPS, rather than personal licence holder.
  2. Allow the police to object to a new DPS based on the crime prevention objective in general rather than as at present “exceptional circumstances”
  3. Allow licensing authorities to require a “criminal records declaration” with each change of DPS.
  4. Allow a DPS or person with “accredited training” to give up to 50 TEN’s, otherwise the limit will be 5 for those without accredited training.

So whilst in some cases paperwork would be cut down in practice there may be little gain to the trade.

The full consultation, which closes on 7th November, and information on how to respond can be found here: “Consultation, Personal Alcohol Licences: Enabling Targeted, Local Alternatives“.

Scotland – Highland – Board drops proposal for the use of plastic ‘glasses’ in all pubs

Posted: 11 Sep 2013 05:00 PM PDT

A proposal to extend the use of plastic drinks glasses to all pubs in the Highlands has been dropped.  Currently late-opening clubs must serve all beverages in plastic receptacles after 21:00 but the Highland Licensing Board held a public consultation which expired on the 31 July on a plan to extend the rule to all pubs across the region.

The proposed policy though has been rejected in favour of a new policy that will take effect from 1 December.

Under the alternative policy, drinks will have to be served in plastic glasses only in places where the board considers it will improve safety.  Further, premises which already operate with the plastic glasses requirement as a condition of their licence will be able to request that it be removed.

Following on from Boards including Glasgow and Edinburgh, the new policy will also allow pubs and clubs to sell alcohol earlier and for longer on Sundays with the general restriction from noon until midnight on Sundays, being amended to 11am until 1am the following day.

 

The new licensing policy statement will be fully adopted at either the next meeting of the Board on 1 October or at its meeting on the 5 November with the policy itself coming into effect on 1st December.

Fake ID – a useful resource?

Posted: 12 Sep 2013 05:00 PM PDT

Sheffield Safeguarding Children Board has produced a useful and interesting factsheet on the use of false ID, in part directed at those who may be tempted to use such and the possible consequences of so doing.

In case of interest it can be found here: https://www.safeguardingsheffieldchildren.org.uk/welcome/information-children-families-public/information-children-young-people/false-id.html

PwC 2014 Hotels Forecast just released

Posted: 12 Sep 2013 05:00 PM PDT

The PwC Hospitality and Leisure Practice ‘Hotels Forecast for 2014’ has just been released and a copy can be found here, in case of interest.

Their executive bullet point summary of a very comprehensive review of the market is that:

• “We remain cautiously upbeat, but increasingly optimistic, on the outlook for UK hotels

• The Provinces have seen a stronger performance in 2013 and we expect more growth in 2014

• London has experienced a weaker, more volatile performance but we anticipate stronger pricing in 2014 and record RevPAR”