Tuesday, 10 March 2009

Pubcos Have Ripped Heart out of Industry

Yes what I think, but no, not what I have said in so many words. The Morning Advertiser, a prominent trade paper says so though the vehicle of a spoof blog, written by the fictitious "Sir Shannon Alberry."

"Sir Shannon" says this "So how have the owners of the major pub companies behaved? Doing a bit of research I have noted that the directors of the main pubcos have sold between them about £50m of shares between 2000 and 2006. The share prices are now a fraction of their former levels — both of the main pubcos shares are more than 90% off their peak. Surely given the protestations as to the robustness of their model — now would be a great time for them to be snapping up the shares. But no — not a single purchase. Indeed in recent times the two leading lights have exercised Long Term Investment Plans and taken even more money out of their companies.*

On the basis that actions speak louder than words — they are telling us that the pub model is indeed dead, that both companies are going bust, and they are getting all they can out before the ships sink."

I guess this must be what the MA believes, despite the vehicle they choose to say so. They may well be right. The PubCo model is creaking at the seams.

*More detail and the original article here

1 comment:

arthurcaskey said...

Hi, just reading Fast Food Nation and an interesting comparison would be with the franchises that the likes of Taco Bell and McDonald’s offer to hapless Joes — especially those with no experience of business (think we have all seen landlords of that persuasion, ie ‘I retired and fancied running a pub’). Furthermore, I heard a withering indictment of the whole PubCo genesis in the wake of the Beer orders the other week from a successful licensee who had loads of industry connections — something about floating money (got kicked out of Economics GCSEs so couldn’t understand totally); you wonder if it all has been one big con, but then what would have happened to the pubs that the Ents and their pals snapped up: would they have closed? Or been bought up by breweries? Late in the day they (the PubCos) have joined hands with SIBA (DDS) and now the National Cask Ale Week and realised the value of pubs, but I wonder if they can survive. A licence to print money?