Monthly Archives: July 2016

Twenty Tips of good advice to improve your business

Pub Doctor Large

Twenty Tips of good advice to improve your business

1. Imagine your pub outlet is like maintaining your car

Do a quick diagnostic check on the engine of your business.

Mark yourself out of ten on the following areas:

Finance E.g. have you end of year accounts? Monthly profit and loss? Stocktaking reports?

Marketing E.g. how often are you advertising? How much are you spending? Is it working?

Operations E.g. have you a staff training manual? Is the team upselling? How often do you have operation team meetings?

Ask yourself, what needs to be done to improve the weak scores/areas of your pub?

2. Think of your business goals like a sat nav system – getting you from A to B efficiently – who uses a paper map book now?

What’s your goal for the business?

How much money do you want to make?

How long do you want to be a landlord?

What’s stopping you getting your business from A to B? Any roadblocks?

Your own management style?

Difficulty in getting funding for development?

Erratic staff performance?

An inefficient Advertising and Promotion plan?

3.Your staff are your biggest asset – are they performing on flat tyres?

Do you have a staff training manual?

Staff systems and procedures- think opening and closing the bar

Do you have up to date job descriptions?

Do you have staff appraisal sessions?

Do some members of staff have performance lapses?

4. Could you be getting more mpg out your petrol? Are you on top of the financial side of the business?

When was the last time you checked the food costs and made a comparison against a competitor?

If you have stocktakes are you making the right gross margin? If not where is the leakage?

Is the kitchen managing portion control and wastage?

What net profit do you want to make in the next twelve months? Have you got a profit and loss forecast?

5.

Manage your time better…so you get the important tasks of the business completed

Delegate more. Your staff are there for a reason.

Has your team got individual job descriptions?

Do they understand what you are trying to achieve?

Have you got a mission statement?

Have you weekly individual action tasks for your employees?

How often are team meetings?

6. Train your mind or find guidance in taking more calculated risks

Customers want the “Wow” factor.

What’s your big promotion or event?

Stop playing it safe, think of a dream situation and make it happen!

See failure as something learned.

7. Motivate your team

It doesn’t take a lot of effort to get the best out your team. A “well done” today or a pat on the back tomorrow can be appreciated by everyone.

Do you have a staff incentive scheme?

Are your taking staff away on a “jolly”?

Do you offer a staff discount on food and drinks?

8. Smile and connect more

If you do not have a customer service procedure in place, just smiling at the customer and saying “Hi how you are today?” is a good start. Check out COSAP Staff performance training www.cosap.co.uk

9. Don’t discount!

It’s lazy and can give the perception that you’re needy. Look to add value to people’s pub visits – think over delivery – people like presents.

Free pot plant for Mothers Day

Free Easter egg hunt for kids

Free Pint for Fathers Day

Kids menus – free ice creams

Free glass of Prosecco on arrival

10. Audit your competitors. Have a meal and benchmark the

Ambience

Customer service

Customer profile

Menu prices

Promotions against your business. Is there something you could improve on?

11. Through eyes of the customer

Get a professional mystery audit on your operations and service, don’t wait for feedback from sites like Trip Advisor. Get ahead of the game and identify your operations’ weaknesses early otherwise you will lose further revenue opportunities!!

12. Think of your marketing like heartbeats

Keep it consistent and repetitive and at the forefront of the customer’s attention window.

How many different tactics are you currently using?

Have you built a 12 month Advertising and Promotion budget & campaign?

Are you promoting online and offline?

13. Point your business in front of the right target market

Think narrowcasting not broadcasting the smaller the target the bigger the bulls eye!!

Think local customers first

Collect the email addresses of current customers & create an email database

Give customers a flyer of promotions with their bill

Put promotion offers in the local village news

Send a newsletter through the letterboxes of local residents

14. Think of your outlet as a brand

How do customers perceive it?

What emotion does it evoke?

What is it saying to them?

What’s your strapline? “We strive to over deliver on the customer expectations on each and every visit”

15. Appreciate the customer lifetime value

How can you develop different entertainment occasions to drive sales to loyal customers?.

Remember, it costs you 6 times more to get a new customer than servicing an existing client.

16. Think of your website as an information site, fixing an entertainment problem for the customer that ignites a decision

Is the site easy to use?

Are your promotions up to date?

Have you got an enticing product offer?

Have you got an online booking system for diners?

Is the site mobile compliant & user friendly?

17. Stop promoting offers on social media sites like Twitter

Selling your products & services should only be 10% of the conversation.

Use images of products & events

Create two way conversations

Share interesting articles

Automating your messages on social media will save time. Look at a database like Hootsuite to assist you. https://hootsuite.com/

18. Don’t believe your food is so good that your menu prices get inflated, putting off return visits from customers. It happens a lot!!

Instead keep costs under control to maintain margins

Have a 3 quote cost system from suppliers

Portion control your food

Create a stock in/out system

Keep kitchen wastage sheets

19. Entice the customer with the perception of added value food promotions

Valentine’s meal £24.95 pp Three course meal with

Free bubbly on arrival

Red rose for the lady

Chocolates on departure And remember to get your suppliers to pay for the extras!!

20. Ensure you have a weekly sales forecast for the next 12 months that’s automated and quick to update.

Here’s a forecast worth £69.95 And its yours for free to download!! @ www.omark.co.uk

And guess what!!

This and much more can be done for you via my complete 6-12 month Business Development Package – With a guaranteed return of 3 times your investment. For more information www.omark.co.uk Or phone 07931 238211

To Contact Lester Pyatt for further advice and guidance

 

Family Brewers launches new Codes of Practice:

Use Co logo ALMR

Family Brewers launches new Codes of Practice:

New codes of practice for leased and tenanted pubs have been published by the Independent Family Brewers of Britain (IFBB) in conjunction with the British Beer & Pub Association (BBPA) and other companies representing the sector with up to 499 pubs.

The two new codes, one for lessees and another for tenants in England and Wales, ensure there will be a seamless transition for lessees and tenants with a pub company operating fewer than 500 pubs.

A further code for Scotland is also being published.

Lessees and tenants covered by the code will continue to enjoy the same low-cost arbitration services for rents (PIRRS) and other disputes (PICAS) overseen by the Pub Governing Body (PGB).

The British Institute of Innkeeping (BII) will continue to administer the service on behalf of the PGB. As a requirement of IFBB and BBPA membership, all member companies will be covered by the codes.

In addition, Trust Inns and NewRiver Retail have already signed up and talks are taking place with other companies that are not members of either of the two leading organisations.

To make the system of self-regulation more streamlined, and as the codes already set minimum standards, companies will no longer need to produce their own company codes for accreditation.

However, it is envisaged the PGB will develop mechanisms to monitor compliance by code signatories, over time. In total, the code covers more than 4,000 pubs in England and Wales.

Family Brewers chairman James Staughton said: “Family Brewers is committed to driving transparency throughout the industry and we have worked hard alongside key stakeholders to co-create the new code of practice.

All of our members will adhere to the new code and it now forms part of our membership criteria.

We are committed to building stronger relationships with tenants and lessees and the introduction of the code is another example of how Family Brewers is focused on attracting and retaining the industry’s best talent across accommodation, food and pubs.”

Latest Leisure Industry News, Brexit, Rates and others

Propel

Latest Leisure Industry News, Brexit, Rates and others

Brexit has critical implications for UK’s beverage sector, new Rabobank report states:

Brexit will have critical implications for the beverage sector given the UK’s role as both a major importer of wine and a major supplier of scotch, according to a new report by Rabobank. The report breaks down the impact of Brexit on different beverage sectors. The report said the Brexit vote would have critical implications for the wine industry, with knock-on effects felt in nearly all major wine-producing regions. It stated: “The prospect of the largest wine-importing country in the world leaving its free trade agreement with the largest wine-producing region in the world will have an obvious impact on trade flows in the long term, but the marked devaluation of the British pound will begin to drive some of those changes almost immediately. The EU is, by far, the largest supplier of wine to the UK – France, Italy and Spain alone supplied 60% of British imports in 2015 – and assuming the soft British pound reduces demand for wine imports, those wines will need to find new markets. EU suppliers are expected to redouble their efforts in other markets, such as the US and China, which will impact domestic suppliers, as well as other foreign competitors.” For beer, the report said although the UK was a fairly open beer market (18% of consumption volume is imported and 13% of production volume exported), most leading brands were owned by international brewers with production facilities in both the UK and abroad. It said British brewers, including the craft beer sector, could see domestic competition ease as foreign competitors were affected by weakness in the British pound and the long-term threat of trade barriers. For the global spirits market, the report stated the weakness of the British pound would begin to have an impact on British spirits imports but would provide opportunities for scotch exports in the near term. It said scotch suppliers were clearly concerned about the potential of losing the free trade agreement with their largest market. However, it added that if Scotland broke away from the UK and remained in the EU, this would alleviate the problem for scotch suppliers but EU wineries might be “less happy about providing free access to the EU market for scotch without receiving reciprocal access to the British market for wine”.

BBPA sets out new self-assessment model for business rates and calls for more frequent revaluations:

The British Beer & Pub Association (BBPA) has called for more frequent revaluations of business rates and has set out proposals for a new self-assessment model. The BBPA is supporting the government’s objective of moving to more frequent revaluations of business rates, to at least a three-yearly process. To help make a system of frequent revaluations work better for both pubs and the government, the BBPA has set out proposals for a new self-assessment model in its consultation response. This would be based broadly on the current methodology, but with greater flexibility built in, to help avoid additional costs and administrative burdens on the pub sector. Business rates already make up about 10% of pub operating costs. Currently, business rates are calculated based on an outlet’s Fair Maintainable Turnover (FMT), the level of revenue that a reasonably efficient operator would be able to generate in the premises. In practice, rates can be based on actual turnover, and this can penalise successful businesses that are performing beyond expectations. The BBPA said reforms to the business rates system should focus on FMT, while increased frequency of revaluations would ensure rates are more closely aligned with current market conditions. The BBPA’s proposed self-assessment model would give licensees greater insight into the process, and added transparency. This would also allow for the government’s aim of more frequent revaluations without significant cost, to either government or businesses, the BBPA said. It is also calling for a light-touch approach when it comes to compliance and enforcement of any new scheme – one that does not penalise genuine mistakes or self-assessments put forward in good faith but are subsequently disputed. BBPA chief executive Brigid Simmonds said: “We have always believed that the pub sector needs more frequent rates revaluations, which is essential in ensuring that the business rates burden is spread more fairly and better reflects the current market. The self-assessment approach that we are putting forward offers both pubs and the government a way of achieving this in an efficient way that would be good for both.”

BHA calls for Seaside Tsar:

A Seaside Tsar should be appointed to help Britain’s forgotten seaside towns fight back from decades of decay, according to new research that paints a grim picture of the problems many coastal communities face. The report, commissioned by the British Hospitality Association (BHA), said people living in seaside towns were more likely to be poorly educated, unemployed, unemployable, lacking in ambition, claiming benefits, and living in multiple occupation housing. A separate survey, conducted by the owners of Butlin’s, found more than half of the British public had not visited the British seaside in the past three years, while 65% believed the British seaside was run-down and in need of investment. Nine out of the ten most deprived neighbourhoods in the UK are seaside communities, according to the Department for Communities and Local Government 2015 Index of Multiple Deprivation. The collapse of shipbuilding and fishing, the decline of the traditional seaside holiday, growing drug use, and cutbacks in budgets affecting maintenance of public places, street cleaning, tourism promotion and the provision of education had all contributed to the situation, the report stated. The BHA report – Creating Coastal Powerhouses – said businesses in seaside towns were more likely to fail, especially if they provided accommodation, and called on the government to create Coastal Enterprise Zones to encourage businesses to move to and invest in the coast. The association, which represents more than 40,000 businesses in the hospitality and tourism industry which, in turn, employs 4.5 million people, cites the successful regeneration of Folkestone in Kent and along the Jurassic Coast in Dorset and east Devon as examples of how the British seaside can recover.

CBRE – steady growth in June for commercial property returns and rental values but capital value growth slows:

UK commercial property rents grew by 0.2% in June despite uncertainty in the build-up to the EU referendum, according to the latest CBRE Monthly Index. Capital values grew by 0.1% in June, a drop on 0.2% in May, but the 0.6% total returns for the month matched returns seen almost every month of the year to date. In H1 as a whole, rental value growth hit 1.1%, compared with 1.7% in H1 2015. Capital values grew by 0.6% for H1 2016, compared with 4.1% in H1 2015. Total returns were also lower, from 6.7% in H1 2015 to 3.0% in H1 2016. This lower return partly reflected an increase in stamp duty land tax in March. Miles Gibson, of CBRE UK, said July’s monthly index would give a clearer indication of how monthly-valued assets had been affected by Brexit.

ALMR chief executive calls on Theresa May to guarantee rights of non-UK EU nationals to stay in UK:

Association of Licensed Multiple Retailers Kate Nicholls has called on the next PM Theresa May to guarantee the rights of non-UK EU nationals to stay in the UK. She said: “With Theresa May now confirmed as the next UK Prime Minister, the government must act decisively to secure our long-term economic stability, business and consumer confidence. The reaction of the markets today shows how valuable certainty and stability is for investors and the same is true for business, particularly in hospitality which is a key engine of economic growth and employment. We now need a clear road map to lock in competitiveness and allow companies to reliably plan ahead for the future – particularly around recruitment. The new Prime Minister will set the tone for the UK’s approach to the EU negotiations and we are pleased that she has sent a clear signal that nothing will be rushed and no steps will be taken until we know what is needed from them. She must ensure that the needs of sectors like hospitality and small businesses are taken into account – simple access to the single market, the ability to hire the right people and driving down the costs and burdens of regulation. Above all else, we call on Theresa May as one of her first acts as the new Prime Minister, to guarantee non-UK EU nationals, many thousands of whom work in our pubs, bars, hotels and restaurants, to be granted the right to remain in the UK both before, during and after the negotiations. We need a clear Brexit employment strategy.”

Latest Micro Brewery News

Beer Pump Handles

Nottingham-based micro-pub operator opens Derby site:

Nottingham-based micro-pub operator The Barrel Drop has opened a site in the former Saddlers Bar premises in Sadler Gate, Derby. The company has launched Hop Gate, which features 13 craft keg beer lines, one lager, four casks, lots of cans, and also has more than 40 spirits will be on offer. The property has undergone a comprehensive refurbishment and features a large outside terrace to the rear. Owner Chris Farman said: “We are looking forward to bringing something new and unique to Derby. Hopefully the bar will provide a cosy atmosphere to all drinkers.” Darran Severn, of FHP Property Consultants, which acted on the deal, said: “This quirky property sits in an excellent location and is well suited to this user. The leisure circuit continues to bolster its offer in Derby and there is more to come in the next few months.”

Arran Brewery plans crowdfunding push to fund further expansion:

Arran Brewery is set to launch a new crowdfunding initiative to fund its expansion plans in the UK, Europe and the US and bring bottling production in-house. Arran Brewery managing director Gerald Michaluk told the Ardrossan & Saltcoats Herald: “We have a significant US advantage having our own import business there, while bringing bottling in-house makes business sense.” Arran Brewery used a first round of crowdfunding in late 2013 to open import companies in the US and Spain, to purchase sites for expansion, and to complete the first phase of an upgrade of its brewery on the isle of Arran. It also developed a lager brewery, hotel and visitor centre on the banks of Loch Earn in St Fillans, Perthshire. In addition, Arran’s Devils Dyke Brewery in Cambridgeshire, which the company acquired in April 2015, is set to begin production later this summer. The small brewery, attached to The Dykes End pub in Reach, is the staging post for the company’s expansion into the London market. The brewery will produce up to 50 different beers a year and act as a research and development centre, with beers sold exclusively to 26 craft beer outlets in London and Cambridge. Arran has also been seeking expansion through acquisition, having recently failed to purchase the Loch Ness Brewery from its liquidator. Michaluk said: “We are looking for strategic partners in the UK and around the world.”

Bath-based Electric Bear Brewing Co expands brewing capacity as it celebrates first anniversary:

Bath-based Electric Bear Brewing Co has expanded its brewing capacity as it celebrates its first anniversary. As a result of growing demand and sales, Electric Bear will add two 20-barrel fermentation tanks to its brewery in Brassmill Lane. The new fermenters and 2,000-litre conditioning tank will see the brewery increase its brew days to four per week to keep up with nationwide distribution. Chris Lewis, founder of Electric Bear Brewing, said; “It’s been an incredible first year and we’ve been overwhelmed by support from the trade in terms of stocking our beer and the locals visiting the taproom. Year one was all about producing consistently good beers but we also wanted to have some fun and experiment with flavours, which we’ve been doing with our World Series range. Year two is going to see us being more experimental and placing our focus on keg beers. The reaction we’ve had to our World Series range of keg beers has been outstanding and it’s what we enjoy brewing. Expect to see plenty more interesting flavours and beer styles coming out of the brewery.” Since launching in July 2015, Electric Bear has gained stocking in pubs, bars and independent bottle shops across the country. The brewery has recently appointed new head of sales Ryan Read to continue a nationwide sales push with a focus on key cities, including Birmingham, Manchester, Leeds, Sheffield and London. A first anniversary beer is being brewed and will be available from August.

 

M&C, Latest view on the MRO and other News

Morgan Clarke Logos copy

MORGAN & CLARKE JULY 2016 NEWSLETTER NO. 53

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, Braunton, Lewes)

June has certainly been a month to remember, not only with the full publication of the Pubs’ Code, etc., Regulations 2016 with all of its attendant complications, but also the quite unexpected – and would seem fairly decisive – Referendum on the UK leaving the European Union. The latter has been generally well-received by the Leisure Industry on the basis that the knee-jerk reaction in the currency market has, inevitably, made the pound weaker with foreign tourists getting more value for money and thus encouraging tourism from overseas. It also has the knock-on effect of making holidays abroad more expensive with the emphasis of spending more leisure time in the UK. In that respect, the Tourist Industry is in a win-win situation.

However, on the City Centres’ hotels front that depend upon business customers, the short-term result might be seen as being negative if there are less overseas’ business travellers as a result of putting on hold far reaching business decisions. Fundamentally, nobody knows or can accurately forecast what the future holds with the spectre of uncertainty being exploited heavily by negative thinking.

Turning to the Statutory Pubs Code and, of course, MRO – Option, we have a rather telling quote in an email to one of our Client Tenants from a senior member of Enterprise Inns who stated in part.

“as discussed, MRO is a bit like Brexit – you need to be fully informed of all the facts. As we discussed, this is not a simple equation of buying your beer cheaper. I attach a document which outlines some of the things you ought to consider. There are many other considerations in the round, e.g. you may need to purchase landlord’s F&F where relevant (boilers, cellar coolers, bar fittings, etc.). You will also need to produce a Business Plan for five years to the end of the Agreement which needs to be signed off by an accountant. You will need to set up an R & M Fund to pay for any dilapidations’, etc. Ultimately, the decision is yours.”

The remarks made are not in respect of a lease renewal but a standard rent review which happens to fall on 25 July 2016. This may or may not be after the final implementation of the Statutory Pubs Code. Basically it is on a knife-edge as none of the pubcos or brewery companies affected by the Statutory Pubs Code have commented on whether they would backdate the legislation to the intended implementation date of 26 May 2016, or if the new legislation must be backdated as a part of its implementation.

  1. The Regulations as Ratified in the Statutory Pubs Code

Section 31 (page 25) deals with Terms & Conditions Regarded As Unreasonable in Relation to Proposed MRO Tenancy, etc. Sub-section 2 then states…….

the terms and conditions of the proposed MRO Tenancy taken together with any other contractual agreement entered into by the tied pub tenant and the pub owning business in connection with the tenancy, are to be regarded as unreasonable for the purposes of Section 43(4) of SBEEA 2015 if they a) include a break clause in relation to the MRO tenancy which is exercisable only by the pub owning business, b) impose a service tie in respect of insurance other than buildings’ insurance with the premises to which the proposes MRO tenancy relates or c) are terms which are not common in agreements between landlords and pub tenancy who are not subject to product or service ties (emphasis added)”

It would seem that Section 31(2)(c) is critical to the content of any proposed MRO tenancy and, to that end, we consulted “M’learned friends” as to the practical implications of 2(c).

The most persuasive guidance to free-of-supply tie leases that effectively took over from previous supply-tied arrangements, is that of Wellington Pub Company who have an estate of something in the order of 700 pubs – all of which are free-of-tie and all of which have been in being for many years. Those leases have no requirement that the tenant should own the landlord’s fixtures, fittings and effects, boilers, central heating systems, kitchen ducting, lavatory fitments, etc., etc. Superficially, it would appear that a very solid precedent has been established with the “common terms in agreements between landlords and pub tenants”. Furthermore, in all of the free-of-tie leases that we have seen with private landlords, there has never been any mention or requirement of the purchase of the landlord’s F&F.

  1. What are the “Full Facts” that you would need to make an MRO decision?

For a pubco or brewery tenant/lessee to make a considered decision over the option of MRO, it seems self-evident that you must have both sides of the argument on which to make a factual decision. This, by necessity, must mean that the landlord should freely state their considered opinion of the level of free-of-tie rent and, in so doing, justify how they came to that decision

Understandably, before the publication of the precise and revised wording of the Statutory Pubs Code, pubco and brewery Retail Field Staff were reluctant to make any form of considered corporate judgement which was often shielded behind “legislative uncertainty”. That has now disappeared in that we all know the content of the Statutory Pubs Code, notwithstanding that the implementation date has not yet been ratified. What we do not know is whether or not this new legislation will be backdated either by law or voluntarily.

Imagine our surprise when one of our Clients recently requested a Parallel Rent Assessment only to be informed by the pubco Retail Field Staff “I’m not in a position to comment as the Pubs Code has not yet been implemented. I would suggest you go and ask the pubco’s Adjudicator, Paul Newby to give an Opinion”.

Ducking the issue in this manner is more than a little curious as Paul Newby would have no idea of on-site circumstance or any of the factors that would affect the specific rent calculation. To have “all of the facts at hand”, you have to have a solid and reasoned view from your landlord as to what they think the free-of-tie rent should be and also, formal confirmation of precisely what they consider should be in the MRO future agreement that does not wholesale change the current agreement.

  1. Trigger Notices and Timescales

There are a number of trigger points that start the process of the consideration of MRO. These include a) the service of a Section 25 Notice, b) the service of a Section 26 Notice in the absence of any notification from the landlord, c) the service of a Rent Review Notice and Rent Assessment Form, d) either the lease renewal date or rent review date if the earlier mentioned items have already been served.

It is essential that any of these trigger-notice dates are closely followed and it would be so easy to let the restricted timescales slip by. It is not entirely clear in the new Statutory Pubs Code as to whether or not it is a specific requirement that the landlord must remind the recipient of the various different Notices of the tight timescale and if that timescale is not followed, that the opportunity for seeking the consideration of MRO would then be lost.

  1. The Subversion of Business Plans

There is no dispute and, indeed, no question that a prospective lessee, either of a new lease or on the assignment of a current lease, must give appropriate reassurance to the landlord through the substance of a carefully prepared Business Plan. The applicant must confirm that they know what they letting themselves in for and that they have the capability and experience, either practical or through recent training, to take on the business concerned. Indeed, a Business Plan is a vital and essential tool for concentrating minds in many different directions.

However, there have been a number of examples in recent time where a previously ratified Business Plan has been utilised by pubcos and major brewery companies in the justification that the current passing rent should not go down. The following is a direct quotation from just such a senior member of the landlord’s staff which illustrates the mindset.

“The existing level of rent is that quoted by the proposed assignee in the Business Plan recently supplied to us which I would contend represents a view of the market rental level (assuming that a premium is being paid)”.

So we did some further digging and found out the following…..

In this case there was an open and frank discussion between the proposed Assignee and the Pubco Retail Field Staff. The initial Business Plan, which was undertaken on the basis of the current rent, was surprisingly without the knowledge that a rent review was due within nine months. When this fact was revealed, the intention of the assignee was to insert a lower rent than the current level to reflect what they thought should happen and also, to underscore future viability. It was emphasised very heavily that the Business Plan could only mention the current rent and, if it did not, then that Business Plan would not be signed off as being acceptable. Fundamentally, the only rent possible to use for an acceptable Business Plan is the current rent. If you don’t use the current rent, the Business Plan will not be accepted and the assignment will not take place. It is a ‘Catch 22’ situation which should not be construed as implying that the current rent is the correct level of rent if there is a rent review within the next twelve months

  1. MRO Rent Calculations.

In this case there has been some ill-informed and negative press commentary recently that in valuation terms, the free of tie rent should reflect the market rental levels for free-of-tie public houses, not via some “arbitrary tinkering to the shadow profit and loss account”. Furthermore, heavy regard should be given to current market evidence. It is contended that this will lead to a larger than expected increase in rent than would otherwise be anticipated and that if that is true, then the costs can be off-set against reduced beer costs which may produce a negative shortfall between the two.

We fundamentally disagree.

The free of tie rental market – as outlined earlier in this Newsletter – is dominated by Wellington Pub Company. The leases, which are now free-of-tie were, to a large extent, the original Inntrepreneur leases which generally have no requirement that the lessee has to reveal private accountancy data. That being the case, even if evidence is made available of free-of-tie rents, in all probability you will never know the link between rent and total sales or the split between wet and dry. Fundamentally, you cannot make a reasoned comparison. Thinking that you can is just so much hot air. In very basic terms, the difference between supply-tied and supply free is the difference in gross profit margins on wet sales alone. In the majority of cases, the current supply-tied lease has a requirement that accounts must be revealed. This enable the re-assessment of the free-of-tie situation to be carefully considered by both landlord and tenant. There is no effect on dry sales. The increase in monies available for either lessee income, or for the landlord as rent, is reflected in the increase in gross profit. That increase is then reflected in the increase in divisible balance which is shared, generally, 50:50 between landlord and tenant. It is that simpl

And, finally……bearing in mind the events of the 23 June, the following tickled our fancy!

* Politics is the art of looking for trouble, finding it everywhere, diagnosing it wrongly and applying unsuitable remedies (Groucho Marx).

* A politician never believes in anything he says so he is always amazed when other people do. (Charles de Gaulle).

* Politics are almost as exciting as war and quite as dangerous. In war, you can only be killed once but in politics – many times. (Winston Churchill).

* I have orders to be awakened at any time in case of a national emergency even if I am in a Cabinet Meeting. (Ronald R

Best Wishes from the Team at M & C

Email: info@morganandclarke.co.uk

Phone: 01285 719292 and 01285 760370