Admiral Taverns, and we all thought they were improving???
Pot Boy South is becoming more alarmed than before at the attitude of Admiral Taverns to keeping their ‘business partners’ well and truly alive. Admiral are the supposedly touchy feely good guys of the Pubco morass but they seem to have a major problem with product discounting, especially the main National brands from which they get huge wholesale profits, say up to £240 per barrel. Currently across the Admiral estate there are no discounts at all. If you plead for some help, there’s nothing in the cupboard at all. Unlike Punch who seem to start at £40 per barrel being easily on offer and Enterprise at £35 per barrel. Enterprise ‘Business Recovery’ schemes in the short term are up to £150 per barrel.
So EI and Punch basic discounting is not very much you might think, but in this day and age of skinny margins to survive, if you have a 200 barrel pub, £40 per barrel is like having a rent subsidy of £8000.To a few of Pot Boy’s AT mates that is the difference between survival and going down the tubes. One of the ‘Loyal’ Admiral field troops came clean to Pot Boy the other day. Seems that there is a three line whip out that under no circumstance should any discounts be given and rents must, absolutely must, be kept at the current levels or go up a bit.
Seems AT have been keeping a snakes belly low profile as to just how bad things really are in the bottom half of their estate. Beer sales are dropping off a cliff and the wholesale income that they desperately need to service their toxic debt is falling likewise. Bankers are expressing concern at the consistent fall in income to keep their banking covenants sound. Things are very tough indeed and Admiral are battening down the hatches. Just how deep in the Do Do they are at AT that they seem hell bent on seeing their loyal lessees go belly up first. Head in the sand stuff solves nothing if this double dip recession keeps on getting worse. The tenantable goose will not keep laying golden eggs.
Where does this AT lack of foresight lead. Punch and Enterprise are to a small degree facing up to a few realities, but on the grounds that your survival is in line with their Corporate thinking to suit them not the tenant. For instance, convert your Whitbread guest ale lease to an Enterprise Retail Partnership Agreement and we will bring down your rent. Same with Punch and the Growth lease. Usual bo****ks,” we want to standardize all of the very many leases in our estate”. Extend your part tie to a full tie, and again we will bring down the rent a bit. The reality is that we will give you what looks like financial help with one hand, but rob you blind with the other by taking away any non controllable financial edge you might have had with the old lease. Good old Dick Turpin stuff.
Back to Admiral, there’s an increasingly nasty smell creeping up through the floorboards, despite the very seemingly friendly Code of Practice document that met with uniform approval of Arthur and his Round Table of Pubco acolytes over at the BII. Tenant survival? That is never mentioned in any COP document, so that’s OK then! Statements of intent are all very fine, but it occurs to Pot Boy South that when the sky is darkening with chickens coming home to the AT roost, its the tenants that will be toast first, not the boys at Admiral. All too predictable.
Watch this space and back to the cellar.
Pot Boy South.
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