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Tie can be blamed for pub closures


TIE TO BLAME FOR PUB CLOSURES

 

In the first week of January the Morning Advertiser ran an article entitled “Don’t blame the tie for pub closures” written by journalist Pete Brown. An incendiary title which has caused much consternation amongst tied tenants, sometimes rather exuberantly displayed, by all sides of the argument, on the Facebook page. Pete states that he did not write the title and that he is not writing the article to defend the pubco tie and yet the title “Don’t blame the tie for pub closures” does just that. Fair enough you may think, until you actually carry out some research on the data and the claims made, then you can begin to understand why the title is so incendiary to those who actually run the pubs and understand the true cost of the tie, the tenants.

 

The data used was the Economies of Ale report, released by the Office of National Statistics (ONS) that shows that a quarter of British pubs have disappeared since 2008. In particular, the data set used was an excel sheet entitled Public houses and bars by parent size. The claim made was ‘that since 2008 the pubco tie is not the only, nor even the main, cause of pub closures. Tied pubs are doing better than independents. It’s a fact.’ Using the figures for 2008, parent company 250+ units owned, any number of employees, number of Public Houses and Bars by the size of parent enterprise – 6155. We were unhappy with how the data was being portrayed and saw the flaws in the argument, with this in mind we decided to use the large companies own reports and press releases from 2008.

 

We chose the six largest tenanted companies and three large managed operations. In their interim report of 2008 EI claimed to have 7785 pubs, Punch’s interim report of 2008 claimed to have 8449, Marstons claimed over 2206, Greene King 2500, Admiral Taverns 2283 and Star 1015, this makes a total of 24238. Wetherspoons 694 pubs, Whitbread 410, Mitchells and Butler 2000 making a total of 3104 and a grand total of 27342. Clearly this is far in excess of 6155 and throws the other figures out of kilter. Market and Business Development analysis of data from the British Beer and Pub Association and trade estimates said that in 2007 brewery owned pubs 9400 (16%), Pub Company 30400 (53%) and Independently owned (free of tie) 17700 (31%). This shows the flaws in the analysis of the data and therefore in the claims made.

 

In 2018 in the company’s reports and press releases EI claimed 4485 pubs, Punch 1245, Admiral 800, Star 2900, Marstons 1545, Greene King 2855 making a total of 13830. A fall of 10408 pubs. Wetherspoons 883 units, Whitbred 785 and Mitchells and Butlers 1700 leading to a total of 3368, a rise of 264 pubs. It is clear that there has been a drastic drop in numbers of the tenanted and leased pubs.

 

Statista, the statistics portal with statistics and studies from more than 22500 sources, in their Number of pubs in the UK 2000 - 2017 statistic said “Looking at the figures by ownership type, it appears that independent pubs have fared better in recent years than those owned by pub companies or brewers. The number of independently owned pubs rose significantly between 2009 and 2012 and the gap between the share of independent and brewer or company owned pubs has been closing.

The main contributors to the decline in pubs have been those owned by a pub chain or pub company, particularly leased or tenanted pubs, which have more than halved since 2008. Pubs tenanted or leased by brewers rose by almost a thousand in 2012, before falling in the following years. Managed pubs owned by brewers however have increased, from 2,300 in 2013 to 4,00 in 2016.” This is exactly what tied tenants and campaigners have been saying and in complete contrast to the Morning Advertiser article! Considering all of the above we are content enough to suggest that the beer tie can be blamed for pub closures!

 

As far as we can tell the data used in the article does not distinguish between enterprises managed arms, commercial arms or the leased and tenanted arms, neither does it appear to distinguish between the big 6, whom operate the tie, and managed pub chains such as JDW, Mitchells and Butlers etc who do not operate the tie. As we have shown above the tenanted/leased model is in decline whilst managed is displaying a small increase. Using enterprises, that do not operate the tied model, to support the tied model is totally unacceptable.

 

The UK Pub Market report of 2018 found that the beer tie had a surge of licensees naming it as the biggest factor negatively affecting their business. YouGov asked more than 2,000 Brits what they thought was leading to pubs closing - currently at a rate of 21 a week - on behalf of CAMRA. Almost 78 per cent of people blamed the high rents and wholesale beer prices charged to tenants by the pub owning property companies. Again we are happy enough to suggest that the beer tie can be blamed for pubs struggling.

 

The gauntlet was thrown down by the author of the article to argue against his analysis, we hope that we have shown above the argument for his analysis and claims is flawed when faced with facts from company reports and press releases. We are more than content to suggest that the beer tie can be blamed for pub closures.

Inez Ward, Founder of Justice for Licensees, said ‘As the quote says “There are three types of lies – lies, damn lies and statistics.” It was suggested that anyone who truly wanted to save the Great British pub should open their eyes, I couldn’t agree more, blinkered vision is not helpful, hopefully this article will help with eyes being opened.’

Gladys Jones, JFL Council member said ‘Journalists should research facts and figures, to not research could be construed as lazy journalism. As JFL so often has to say, this trade deserves better.’

Karen Fullard, JFL Council member said ‘Statistics can be manipulated to prove whatever the author wants.  The truth is the tied model doesn’t work and the licensees stuck in these one sided contracts are being financially sucked dry by their landlords to finance their mountainous debt.’

 

Ends

 

Editors notes:

Justice for Licensees is a campaign group who have, for the last decade, fought to save the Great British Pub -  https://www.justiceforlicensees.org.uk/

Morning Advertiser article - https://www.morningadvertiser.co.uk/Article/2019/01/04/Don-t-blame-the-tie-for-pub-closures?fbclid=IwAR1gm597E95Feo2LIlAo9A87NulKFxgx6IBmHW97XRxcOLPzzUZjkGKn1Pg

Economies of Ale Report – Data set -https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/datasets/publichousesandbarsbyparentsize

Statista - https://www.statista.com/statistics/310723/total-number-of-pubs-in-the-united-kingdom/

UK Pub Market report - https://www.morningadvertiser.co.uk/Article/2018/07/26/Beer-tie-blamed-for-squeeze-on-pub-turnover

https://www.mca-insight.com/market-intelligence/market-reports/uk-pub-market-report-2018/568871.article

 

Camra survey - http://www.camra.org.uk/news/-/asset_publisher/1dUgQCmQMoVC/content/press-release-issue-date-10th-august-embargoed-00-01am-11th-august-supermarkets-tax-and-pubcos-to-blame-for-pub-closures-pubs-are-being-forced-out-of-

 

 


Tuesday 15th January 2019

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