Statutory Instrument 1989 No. 2390
The Supply of Beer (Tied Estate) Order 1989
You will know if you read this blog that I'm not a fan of the big pub companies. I don't like the way they have morphed what was a debt free industry, into one that is mortgaged up to the hilt and that to pay for this they squeeze the life out of those daft enough to work for them. Of course the banks - it always comes back to them - aren't blameless here in allowing such debt to build up. And no. I'm not convinced by siren voices that say as long as you can service that debt, then what's the problem? I read then with no surprise that CAMRA, the Campaign for Real Ale has revealed that the majority of publicans tied to the big pub companies earn less than the minimum wage.
" A representative sample of over 600 licensees were interviewed by research firm CGA Strategy, with the results showing that licensees tied to the big pub companies are substantially worse off than free of tie lessees. A shocking 60% of licensees tied to the big pub companies earn less than £10,000 a year. This compares to only 25% of free of tie lessees who earn less than £10,000 a year. The other end of the earnings scale also shows a stark difference in earnings, with just one in a hundred tied pub licensees earning over £45,000, as opposed to one in five who run free of tie pubs."
The government intends that the PubCos, having failed to put their own house in order, start to play fair with their tied tenants (by regulation), though of course they are resisting it as much as possible. They talk about the the low start up costs, the support they give etc. etc. etc. Just think how much support they could give to all their tenants as well as their own shareholders who have seen their asset value fall as debt soared, if they didn't owe so much money in the first place.
At the time of the Beer Orders, there were very few pubcos as they would be recognised today. Pubcos were created from the disposal of the national brewers' public house operations following the implementation of the Orders. Concentration in public house ownership increased through merger and acquisition activity in the 1990s, until by 2000 the first of the 'large' pubcos, Enterprise, appeared with an estate of 1,500 public houses. The rate of concentration has accelerated since 2003 with the acquisition by Punch of the Pubmaster estate (3,000 public houses) and the InnSpired estate (1,100 public houses), and the acquisition of the Unique estate (4,100 public houses) by Enterprise. Source: Select Committee on Trade and Industry Second Report
Worse is that the money was taken out of the industry in the form of loan after loan to needlessly set up these miserable giants by a succession of takeovers as illustrated above. The Beer Orders was an idea in theory that was good, but was too easily subverted by the then large breweries, all of which of course, have more or less disappeared up their own backsides long ago, taking even more money with them, while the government, having seen its own intent undermined sat back and did nothing. It has been a sad and sorry tale.
Going back to licensees, the Morning Advertiser reckons their wage equates to around £3.21 an hour given the hours that licensees work.
I suppose you can see why a lot of them are so surly. While it doesn't help their case, they have much to be surly about.
The MA has their take on the story here. It ties in well with my comments on Monday about pubs. The CAMRA story is here.