I don't want to be a 'Soberhero'

Mine's a Daiquiri

It seems that barely a month goes by these days without it being hijacked by a charity eager to encourage us all to stop drinking.

Once upon a time, January was the month when people - normally of their own volition and not for charity – would lock up the drinks cabinet and forswear the public house to give their body a break after the excesses of the Christmas season. A very worthy and sensible ambition (though I remember lunching with an elderly politician and his nephew at The Gay Hussar one rainy January day and a cascade of abuse was directed at the nephew for having the temerity to emerge for lunch and not drink). Dry January has, of course, been adopted by charity and last year more than two million people took part, raising money for Alcohol Concern.

We are now, however, in the middle of a Dryathlon, promoted by Cancer Research, which urges us ‘to give up alcohol this September and become a Dryathlete’ after a ‘summer of overindulgence’. And after labouring through an abstemious month, one would be forgiven for desiring a snifter, but then we are being encouraged to become a ‘Soberhero’ for Macmillan Cancer Support, and remain booze free for the 31 long days of October. Australia has a Dry July campaign; I wouldn’t be surprised to see that emerge here too soon.

Now, this isn’t a criticism of these individual charities who all do tremendous and valuable work but rather a concern about the unintended consequences. Figures released by the Campaign for Real Ale (Camra) in August showed that 21 pubs were closing across the country every week. Supermarkets, which still continue to sell alcohol at prices so absurdly cheap it is impossible for a pub to compete, taxes on pubs and the role of pubcos are all cited as major reasons behind these closures. But these charity events do have an impact on the pub trade. The loss of two million customers for a month will inevitably hit the bottom line. One publican admitted to me it was ‘hard to quantify’ how much of a direct hit pubs took but said its impact was ‘significant’.

It is easy to forget how much of an important role the pub plays in British society. It is a home away from home, a meeting place, a community hub. An IPPR report in 2012 said:

‘One of the most important contributions pubs make to local community life is that they act as hubs for the development of social networks between local people. Our national opinion poll found that outside the home the pub scored the highest of any location as a place where people “meet and get together with others in their neighbourhood”’.

And a study by University Hospital in Basel found, unsurprisingly, in a report published this week, that a single glass of beer can make people more sociable.

The continuing loss of pubs damages the fabric of society. But, this seems to be the ambition of some anti-alcohol campaigns. One representative, from the World Cancer Research Fund, has repeatedly claimed: ‘About 24,000 cancer cases could be avoided every year in the UK if everyone stopped drinking alcohol’. Any, albeit inadvertent, damage this could cause to social cohesion - which, in itself, contributes to the health of individuals - is, it seems, ignored.

And then there is the Institute for Alcohol Studies, which claims to be an ‘independent voice on alcohol policy’, but is in fact mainly funded by the Alliance House Foundation, once known as the Temperance Federation. Four people linked to the IAS were recently among the ‘experts’ advising the government to recommend the reduction of safe weekly drinking limits for men from 21 units to 14.

Roger Protz, the editor of the Good Beer Guide, at the launch of the 2017 edition just this week, warned:

‘the restrictions urged by the medical officers are taking us on the road to Prohibition…. All the real scientific evidence shows that moderate beer drinking can contribute to a health lifestyle. We should listen to the experts – not the kill-joys of the Temperance movement.’

There can be few people who are not aware of the risks posed by the excessive consumption of alcohol, and charities should be congratulated for finding ever more innovative funding techniques in a competitive world, funding vital work. And yes, we should probably all drink less alcohol. But, I hope we have reached saturation point when it comes to month-long dry-outs; it's enough to make one turn to drink.

The day after the night before

I expect there have been a lot of sore heads in the pub industry today. Campaigners, who have spent years trying to challenge the power of the major pub companies (pubcos), might have woken with headaches after celebrating defeating the government over pub rents and the beer tie; pints were eagerly consumed first in Whitehall before the party continued at a south London pub.

Meanwhile, in the board rooms of pubcos, executives are likely to have been rubbing their foreheads in anguish, watching as their share prices plummeted; at one point Enterprise Inns' shares dropped 17 per cent and Punch Tavern's slumped 11 per cent. It must be worrying times for both companies, especially as each is laden with more than £2billion of debt.

The reaction to the vote, which will mean pub tenants tied to pubcos will be able to demand a market rent option (MRO) and buy alcohol from providers other than their pubcos, who often charge a far higher rate (up to 70%) than the open market, has been predictably split.

The campaigners are joyous; the pubcos and their supporters, on the other hand, are despairing. They have spent much of the day predicting apocalyptic levels of pub closures and a vast numbers of redundancies. It is certainly true to say that these are uncertain times and it is hard to be sure of what will ultimately happen.

For the campaigners, yesterday’s vote is an enormous success. These are not professional political lobbyists or campaigners but publicans, or former publicans, trying to challenge a system they see as grossly unfair. Along the way they have been supported by organisations such as Camra, who believe the vote ‘will help keep pubs open and ensure the cost of a pint to consumers remains affordable’ and the Federation of Small Businesses who claimed today the result would be a ‘boost to local economies while giving consumers greater choice’. Greg Mulholland MP, who has spearheaded the campaign in parliament, was understandably in an effervescent mood after the vote and received plaudits from his colleagues – such as Tim Farron – for his not insignificant efforts.

The British Beer and Pub Association, on the other hand, has been predicting doom in the industry as a consequence of the vote. There is barely a news programme on which its chief executive, Brigid Simmonds, hasn’t appeared today. In each appearance she has repeated the claim that the government’s own research shows ‘1,400 more pubs closing, with 7,000 job losses’. The piece of research she is referring to is this by London Economics, commissioned by the Department of Business, and she is certainly quoting it selectively. It actually predicts the closure of between 700 and 1,400 pubs, with the consequent jobs losses of between 3,700 and 7,000. Ms Simmonds has only referred to the top figure.

The London Economics study only consulted pubcos to make its predictions, each providing a sample of between '300-400 anonymised pubs'. It is fair to say that pubcos have a vested interest in this debate and there appears to have been little effort to gauge the opinion from any other side in the exchange.

The report also finds one more reason why pubs might close that hasn't been much mentioned by the BBPA; that several of the stakeholders it interviewed believe the UK is 'still operating excess pub supply of approximately 6,000 pubs'. Definitely a gloomy prospect, but not one that can pinned on Tuesday's vote.

And finally, Ms Simmonds fails to take into account that pubcos have already declared their intentions to dispose of huge numbers of pubs. For example, in their 2013 annual report, Punch Taverns, owners of more than 4,000 pubs, say they want to focus on their core business of 2,990 pubs. Their plans for the non-core division - compromising of 1,106 pubs - is to dispose of them 'over the next four years'.

Enterprise Inns, meanwhile, wanted to dispose of £70million worth of pubs by the end of September this year. It may well turn out that both firms use yesterday's vote as cover for their already declared intentions. Of course, 'disposing' of pubs doesn't necessarily mean they are going to close; but supermarket chains must be rubbing their hands with glee at the prospect.

Contrastingly, according to a survey published in 2013 by the Federation of Small Businesses, 88 per cent of tied pubs said they would be better off if they operated under a ‘fair rent’; 74 per cent said they would spend more promoting their business; 74 per cent said they would hire more staff and 65 per cent said they would cut the price of beer.

Another frequently repeated claim from Ms Simmonds is that the beer tie has been a success in this country for almost 400 years. This doesn't stand up to much scrutiny. Fifty-seven per cent of tied publicans struggle on less than £10,000 a year. Of Enterprise Inns pubs - they have more than 5,000 - they had 579 'business failures' in one year according to their 2013 Annual Report; down on previous years but nothing to boast about. These are not symptoms of a system working well.

And I have lost count of the numbers of tenant publicans who have contacted me personally to tell me about their suffering; struggling under unimaginable amounts of debt caused, seemingly, by the unreasonable demands of pubcos, themselves trying to shift their own debt mountain. Many of these tenants - all, without exception, hugely hard-working people desperate to run good pubs - have now lost their pubs, their homes, their livelihoods, their health. Pubcos have consistently failed to respond adequately to their concerns; it is their lack of action that has led to this turn of events. 

They won't give up of course. The lobbying campaign by the pubcos and the BBPA against these changes has been huge and they have well placed - and immensely senior - allies to almost the top of the Conservative Party. They will hope the government finds a way to drop this amendment. But,  if these changes lead to the demise of the pubco, they need only look in the mirror to find the founders of their own downfall.

Will MPs finally vote to challenge pubcos?

Parliament has been treading water for some months now; MPs spending more time grinding teeth, impatient for the next General Election, than actually participating in worthwhile debates.

But tomorrow, MPs have an opportunity to vote for something which might actually make a difference to the lives of thousands of publicans across the country, who claim to have been suffering greatly under the pubco ownership model (for background on this fiendishly complicated issue, see here).

For finally, after years of campaigning, scores of MPs from all parties are set to back an amendment to the Small Business Bill, which will put a 'market rent option' for tenants of large pubcos on to the statute books. This means that landlords who lease their pubs from the biggest pub companies – those which own more than 500 establishments – will be able to have their rents independently reviewed to ensure they are fair.

And the amendment, tabled by the campaign's parliamentary champion Greg Mulholland, Tory Brian Binley and Labour's Adrian Bailey, could also see tenants able to buy their beer from any supplier, rather than be compelled to buy exclusively from their owners at a marked up price.

The issue's complexity has been its worst enemy for it deserves more headlines than it has garnered. The closure of a local pub is frequently a local tragedy; a community loses its heart, a neighbourhood is deprived of a meeting and sharing place. The mass closure of pubs which Britain has witnessed in the last couple of decades is a huge national shame; a vital cultural seam that threads through our whole national consciousness has been neglected and allowed to decay by governments of all colours. In the ten years after 2002, more than 10,000 pubs have closed, a huge number of which were tied pubs.

If passed, the changes might mean some relief for tenants struggling to live on barely £3,000 a year, and those battling not to end up like Stoke Newington's Kirsty Valentine, forced out of The Alma after a rent dispute. It could curb the practice of churn, which sees tenant landlords forced out of their pub, only to be replaced within a couple of weeks.

Getting to this stage has been a slow old process and, for a time, it seemed the coalition might run out of sufficient parliamentary time to pass any legislation. And even now, despite the recommendations from endless committee reports and reams of evidence, the government has resisted these measures when it eventually outlined their proposals to tackle the pubco issues. While Vince Cable proposed a statutory code for pub companies, campaigners have argued it would remain toothless regulation without this ‘market rent option’. 

While, this option has big support amongst publicans and tenants, the pubcos themselves have lobbied hard against the such changes, with eager support from the British Beer and Pub Association. The latter, quoting widely a widely discredited report, claim the measures could lead to more than 1,400 pubs closing and the loss of 7,000 jobs. It's worth remembering that even if this were true - and for such a dire outcome to emerge it would require the wilful and self-destructive connivance of the pub owning companies - this is actually at slower rate than the current rate of 31 pubs closing every week, according to CAMRA. I do wonder who the BBPA imagine they represent; pubs or pubcos?

Support for the amendment is strong on the Labour benches and has wide backing among the Conservative benches - curiously not including Burton MP Andrew Griffiths, who has been something of an ally of the pubcos - and the Liberal Democrats. Victory for the campaigners must feel unnervingly, worryingly close. But, the government could still defeat the rebels and it has to make its way through the House of Lords; so this long-running saga has some way to go yet.

Time running out for pubco reform

The Alexandra in Penge; now closed but locals hope it will reopen

It is just over a year ago since Vince Cable unveiled his reform plans for large pub companies (pubcos), broadly along the lines for which campaigners had spent years lobbying.

After repeated select committee reviews, the business secretary said: 

‘We gave pub companies every chance to get their house in order, but despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn't working.

‘Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship.’

Under Mr Cable’s plans an independent adjudicator was to be appointed to study unfair practices in the industry, as well a statutory code introduced (for those unfamiliar to the topic, background on the pubco reform campaign can be found here). Many publicans celebrated; finally, they hoped, the pressures coming from the likes of Enterprise and Punch Taverns, would be relieved.

A consultation process began in Spring last year and the government gave every impression legislation would be published by the end of 2013 or early 2014.  

But what has happened? Er, nothing. Barely a word. The results of the consultation have not yet been published  - minister Jo Swinson blames a greater number of responses than they expected - and the government is rapidly running out of time to get any proposed legislation on the statute books; it would be left to a successive government to decide what to do, no doubt setting any reform back by several more years.

It’s no surprise to see a petition has been launched to try and get the issue moving against in parliament. Already, more than 12,000 people have signed their name to the call for the government to legislate; it can be seen here.

But, considering pubco reform has such wide support from across all parties in Parliament - a quick glance at Early Day Motions on the subject and this is clear - why the delay?

There is no doubt pubcos have lobbied hard against any reform and campaigners have highlighted a core of politicians who they claim have blocked the reform moving forward; pubs minister Brandon Lewis and Chancellor of the Exchequer George Osborne the favourite suspects. It sounds plausible enough. Lewis has been very quiet on the topic and, as Vince Cable was initially pushing for reform, his Tory coalition colleagues might well stymie what they may view as Lib Dem legislation.

Labour are trying to seize on this inaction and have tabled an Opposition Day Debate on the proposed reforms, set to take place on January 21st. When the debate was announced, Toby Perkins MP, the shadow pubs minister, said this: 

'It is becoming an annual event that Parliament debates the issue of pubs in January.  In January 2012 the House voted unanimously for a statutory code to regulate large pub companies as recommended by the BIS Select Committee.  In January 2013 after Labour called another debate on the subject, the Tory-led government agreed to introduce a statutory code.

'Twelve months on, despite a lengthy consultation, nothing has changed in legal terms to help struggling pubs and publicans.'

What impact the debate will have is open to speculation. I fear it may already be too late and senior figures have vetoed pubco reform in this parliament. I wait to be pleasantly surprised.


Final point

While this is not strictly lobbying - as it claims to be an independent report - the financial consultancy group London Economics published a report at the end of last year on what might happen to jobs in the sector were the pubco reforms enacted. Such were its findings that it could have been commissioned by pubcos - it wasn't, the Department for Business ordered the study.

In a worst case scenario, it warned that introduction of reform could lead to the closure of more than 6,000 pubs, taking with them up to 40,000 jobs. Its conclusions were in stark contrast to earlier studies - such as this from the Federation of Small Business - which indicated publicans planned to expand if they were freed from the tie.

However, the London Economics report seems to me to be somewhat hampered by some major flaws. The most significant failing was that it failed to take into account the financial stability, or otherwise, of the pubcos (only yesterday the perilous position of Punch Taverns was exposed yet again as warned it could default on its debt if its latest restructure is blocked by bondholders). The debts of pubcos appears not to be mentioned anywhere in the document's 34 pages. And it fails to take into account a pubco may deliberately run down a pub to sell on simply to service its debts. Pubcos may deny such a practice occurs but it is a very familiar story.

Moreover, while London Economics received much of its data from the pubcos themselves, it seems not to have spoken to any pub reform campaigners, or studied their literature; I certainly didn't find any reference to either. 

The study also makes claims which appear not to be the case, such as pubcos being 'responsible for capital costs ie maintenance'. It only takes a brief conversation with tied publicans to discover they can be liable for a whole range of capital costs. And it makes the completely unfounded assumption that 60 per cent of drinkers whose pub shots move to another pub; there is no evidence to support this figure and for drinkers in cities it seems extraordinarily low.

There are at least two sides to every debate, of course, but in this case asking for the contributions of a wide range of voices, would seem to be a prerequisite for any worthwhile, 'independent' report. 

Pulling their last pint?

One night the barman at the pub at the bottom of my road was still pulling pints; the next morning he had gone.

Steel shutters were stapled securely to windows and doors, each pinned with notices warning any would-be trespassers to stay clear. A few weeks later the site has been sold, to whom no one knows. and what will happen to this once thriving community pub remains a mystery. Read more

Time for a Fair Deal for your local

For those who love pubs, it has been described as a ‘last call to arms’.

Today publicans from across the country, with their loyal supporters and locals behind them, will descend on parliament to demand a Fair Deal for Your Local, an impassioned plea for the government to act to help save them.

For pubcos – combined with a series of poor short-sighted measures introduced by a series of governments, the smoking ban and the bargain-basement prices supermarkets charge for cheap, nasty lager –  threaten to make the sight of your familiar, welcoming local a thing of the past.

The all-too-frequently exploitative relationship between large pub companies – organisations like Enterprise Inns, Punch Taverns and Green King – and their tenants is something which has been allowed to fester for far too long.

About 20,000 pub tenants across the country have to purchase their beers, wines and spirits exclusively from their pubcos, and in exchange, they are supposed to benefit from lower rents.

Instead, far too frequently tenants are hit with above market-level rents, making their costs crippling forcing them out of business. A good recent example is the Chequers Inn in Whitney, the Prime Minister’s constituency. After twelve years landlord Simon Moore called it a day in May. While his annual turnover averaged around £230,000 a year, his rent to Enterprise Inns amounted to almost 40 per cent of this.

The reasons for these sky-high rents are various but a key factor is pubcos realised the inherent value of their property stock during the boom years and leveraged absurdly to expand their portfolios. When the credit crunch hit they were left with huge debts to manage.

But it is not just high rents which has heaped pressure on pubs. Selling pubs is frequently seen as a way out by pubcos. Tales of pubs being allowed to decay, driving away punters, until they are no longer financially viable, are legion. And the sector keenest to take advantage of this fire sale have been supermarkets.

It is not the fault of the likes of Sainsbury’s or Tesco’s. Why wouldn’t they be keen to get hold of prominent landmark buildings, well known locally and crowbar in a convenience store?

An edition of the London Drinker last year, the CAMRA magazine which can be found in many of the capital’s good pubs, highlighted this problem. The piece, by Roger Warhurst, began by saying: ‘Fifty London pubs have been converted or redeveloped for supermarket convenience stores since 2010, generally without the need for owners to seek planning permission for change of use.’

A pub’s licences are the real beauty for supermarkets. Large pubs frequently have all that is required – especially alcohol licences.

A recent victim of this loophole is the beautiful George IV pub in Brixton which Lambeth Council’s planning committee narrowly voted in favour of allowing to be turned into a Tesco Metro in May.

The only aspect of the application councillors could really object to was the installation of a disabled ramp – described by one as ‘zigzagging across the front of the building like a mark of Zorro' – and whether it was in keeping with a fine Victorian building. Of course it wasn’t, but as a pub is currently not viewed as viable the committee was left with the choice of an empty building or a shop. That the pub had been registered as a community asset as part of the government’s risible ‘localism’ agenda was of little import.

Today CAMRA have published research providing more evidence how pubcos are squeezing the life out of publicans. As many as 60 per cent of licensees tied to the big pub companies earn less than £10,000 a year, compared to only 25 per cent of the free of tie lessees. And at the other end of the scale, only one in a hundred tied pub licensees earn a salary of more than £45,000 a year, compared with one in five who run free of tie pubs.

So today, the pub trade gather. The government proposes reforms which could ensure tied lessees would be no worse off than those not tied, applying to all pub firms that have more than 500 pubs. It could be the start of a revival. With their parliamentary champions, like Liberal Democrat MP Greg Mulholland and indefatigable campaigners like @Lifelandlady , we should stand beside them and make sure the coalition delivers on its promises.