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Phil Mellows is a freelance journalist living in Brighton  


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        The politics of drinking

           
March 25, 2011


 

 


From crisis to renewal: hopes for the history of the pub

Two and a half years ago I sat down to write a history of the pub industry since the 1989 Beer Orders. Trouble is, the bloody thing keeps moving. I canít hold it down. I can see why historians write about things that happened in the distant past now, things that have ossified into something stable you can get a grip on.

Pub industry history has taken another lurch in the last few days with the conclusion of Punch Tavernsí strategic review. Itís just one company, but itís a big deal. The end of an era in some ways.

Punch once had close to 9,000 pubs. Over the last few years thatís been whittled down to 5,200 tenancies and 900 managed houses.

Now the new boss, Ian Dyson, has announced that the managed division will spin off as a separate firm before the end of the summer and revert to the name Spirit, which is what it was called when Punch orginally bought it. The nameís the same. Only the pubs have changed.

The tenanted estate, meanwhile, will be boiled down at the rate of 500 pubs a year to 3,000 core leaseholds, the pick of the bunch.

The latter came as a surprise to many commentators who thought Dyson would just flog off the whole lot. But it makes sense in that thereís still money to be made from successful tenancies.

This isnít only about paying off debt. Iíve long thought that the two major groups, Punch and Enterprise, were too big. I remember numerous conversations, with Punch in particular, about the wonderful schemes it had devised to support its tenants, but the question was, were they reaching the struggling publican on the ground?

Not only is 3,000 a more manageable number, enabling the company to get closer to its remaining lessees, but it looks as though those lessees will be more established business people anyway, and need less help.

As for the new Spirit, most managed pubcos are in growth at the moment, against the overall trend. Itís interesting that Dyson says he couldnít realise the synergies between the managed and tenanted divisions, because in theory the systems and skills available to managed groups ought to be available in some way to the tenancies. But it obviously isnít happening.

To pay off its own debts, Enterprise has also reduced the size of its estate, but less aggressively. Itís become quite keen on sale and leaseback deals, where you sell the pub to a property company, joyously throw the cash into the air and then rent the pub back and carry on as normal. That only works with certain properties, though, and Enterprise has to feel confident it can keep paying the rent. Itís a risky one.

It seems to me that we are in an end game when it comes to these massive companies that have dominated the industry for the past decade. But what will it mean for the pub?

Throughout the manouvrings of big capital, the rush to expand shareholder value and the raising of stakes the pubs themselves have been just so many chips in the casino.

Those that have survived have done so not because of the strategic decisions made in the boardrooms but because of the skills and commitment of the people running them, the people who smile at you across the bar, the people with ideas and application, the people who keep good beer and, yes, who keep the books straight.*

Hopefully, though we can never be sure, most of the pubs being released onto the market by Punch will one way or another fall into these capable hands and, by the time I finally write it up, what seems like a period of crisis will turn out to be a period of renewal.

 

*I wrote this partly in response to a rather odd speech by former Morning Advertiser editor Andrew Pring. Some licensees are their own worst enemy, but calling them ďilliterate and innumerateĒ seems a little harsh, and is certainly unhelpful.


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