Monthly Archives: November 2015

Christmas Scam for your Customers, (Barrel-Dregs 275)


It’s that time of year again, a nasty Christmas Scam for the unwary.

Worth warning your customers.

It’s that time of year again, a nasty scam for the unwary.

Most people are wary of strange failed delivery notes being put through the door, these days.

This latest one is very direct, a card is dropped through the letter box, via the Postman saying that a parcel could not be delivered from PDS (Parcel Delivery Service), to call a number 0906 6611911 or vaguely similar by now.

A recorded message starts, if anyone should call, the moment it starts you are billed for £315.00.

If you do find a card supposedly delivered by the Postman, call Royal Mail Fraud.

It is worth warning your customers, if any get caught their spending habits could be curtailed for a while, which can affect your business.

Thoughts on the MRO and Pub Co’s

Bad Beer For Export

Thoughts on the MRO and Pub Co’s (Barrel-dregs)

Punch have a new CEO, who may have a fresh approach to the pending Legislation and MRO.

Certain Pub Co’s as we all know have a mountain of debt, generated by a number of self inflicted reasons.

The sharp guys, who created these Companies have walked away with millions, leaving companies teetering, with twitchy staff and lessees wondering what will happen next, the shares are now a fraction of their dizzy heights of bygone days.

The obvious thing has been to reduce the size of the estate, in some cases exposing a serious fall in the book valuation, raising questions that cannot be answered by the management at the time, all history

Punch now have a much reduced estate, by selling off tranches of pubs to various organisations, in some cases the prime sites, a great shame, today is today and yesterday is history.

The sale of further tranches of pubs to New River Retail by major pub Co’s for possible conversion to retail outlets, at whatever price, has to be a short term expedient to raise cash.

Surely with the financial contacts that these Pub Co’s have, it would be far better to do a deal with a large mortgage provider at very advantageous terms to any lessees who would like to buy or has a viable pub. At the same time, whilst the advantageous mortgage deal is in place, they buy all their stock at a better discount than they could achieve as a sole operator, through the Pub Co’s nominated suppliers.

We know as  substantial multiple operators, their discount is substantially greater than a sole operator can achieve.

The lessees deals direct with the suppliers and have the usual monthly trading credit terms, improving their cash flow.

The Pub Co get the surplus discount paid to them the month following, and do absolutely nothing.

In the event of a pub failing, the Pub Co get first refusal to take it back to let or resell it again.

Assuming that the mortgage deal is highly competitive and the supply deal also, with annual upgrades, the ex lessee has no reason to refinance to get away from the tie.

A similar deal can also operate with the MRO, in terms of the supply deal.

The one serious advantage with the MRO deal is that, provided the Pub Co does not get short term greedy by inflating the rent, leases will have serious value and become an asset rather than a liability.

There will be failures, in stead of costing £50K, the Pub Co takes back the lease and re lets, substantially recovering their costs with a profit.

The idea that rents will increase with the lessees taking the MRO, to compensate for the Pub Co’s loss of the whole discount, is never disclosed.

Having owned many freehouses, the discount profitability will only make a very small percentage increase on the overall net profitability, purely because there could be a very slight levelling down in wet sale prices across urban areas.

If leases have serious value, lessees will invest in their businesses, which the majority do not, since any serious investment is perceived as going to the Pub Co, this culture has to change.

By adopting this method, a massive saving in Pub Co admin  costs, BDM’s would become business advisers, which many are considered to be debt collectors.

The discount system works very well, having used it for a number of years with our leased pubs, our overheads were minimal and we were able to set up competitive deals with a range of suppliers and the lessees were delighted.

One Pub Co is talking about converting a large part of its estate to managed houses, using the Landlord and Tenant Act to claim the property back at the end of the lease.

Or offering five year leases which breaks the conditions of the existing lease and gets them out of paying statutory compensation, if they or their predecessors have served a minimum of seven years collectively of the lease, the compensation is based on the rateable value and doubles if they have served fourteen years.

It would appear that approaches have been made seeking offers for twenty year leases with the MRO, at what cost????

The industry have to work together and present a united front to combat legislation that has destroyed the core businesses of many pubs, the new legislation and the MRO needs combined positive thinking, with the benefits of long term trading, not short term cash grabbing and licensees, however good as totally expendable.

Business is flat for many reasons and unlikely to change a number of years, it has always been cyclical, sadly this is going to be a long cycle.

Potboy (Midlands)

The views expressed are not necessarily the editors and 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.


Mulholland hits back: “This Year’s Pubco Panto: Groundhog Day (Barrel-Dregs 274)

Barrel-dregs 2Mulholland hits back: “This Year’s Pubco Panto: Groundhog Day”

By Greg Mulholland MP, 20-Nov-2015

For those that have not seen the MA, click on the links below.

Save the Pub group chair’s explosive response to deputy editor of the Publican Morning Advertiser‘s op-ed piece on his appearance at the Tenanted Pub Company Summit.

Link Continue reading

Category: MRO

The Energy Rip Off, we are all “Lambs to the Slaughter”.

I have been with the same energy company for at least six years.

At the end of every period I religiously use the comparison sites for the best deal, every time, my present supplier comes out in the cheapest five, with a few pounds difference per annum.

The company has one of the worst Customer Relations records according to the Internet, but until the last couple of years, it has been no problem. Link

MROAS, In light of the complete lack of clarity from the Minister


In light of the complete lack of clarity from the Minister on the new policy we may have to consider walking out of Wednesday’s meeting if the BIS don’t answer the key question upfront.
“How is it possible without PRA to prove you’re no worse off ?”
The BIS minister Baroness Neville-Rolfe has been asked the above question 3 times now and we still have no answer.
It is impossible to see how we can proceed to engage with the government if they are unable to explain their new policy on having a pubs code with “no PRA” but at the same time ensuring tied tenants are “no worse off”.
How can anyone be expected to continue to engage with the Government if they cant answer the question and explain their own policy? Continue reading

Punch to invest £250m to £300m in estate as part of strategy review:


Punch to invest £250m to £300m in estate as part of strategy review: Punch Taverns has unveiled its new strategic focus in the wake of the arrival of Duncan Garrood as chief executive. Garrood said: “Since joining in June, I have undertaken a detailed review of the business and today I set out a clear plan for the future. In recent years, Punch has been at the forefront of change within the leased and tenanted pub sector. Continue reading

The latest update on the MRO and other Legislation, from M & C.


Pigeon House, The Broadway,

Oakridge Lynch, Stroud, Glos. GL6 7NU

Email: Phone: 01285 719292

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

Apologies to our wide and varied readership for the combination of two months’ newsletters into one due both to illness and holidays. The last few days have been dominated by the Government consultation – Part 1 issued by the Department of Business Innovation & Skills concerning the Pub Code and the Pub Code Adjudicator delivering “no worse off”. Just when we thought that Government had grasped the basic essentials of the pub industry, our faith in that concept has been brought swiftly back to earth with a great deal more work to be done to ensure that a fair and consistent deal is agreed by one and all to implement what is effectively the will of Parliament. More later. Continue reading