Worried about your pub? Well if it is owned by Punch Taverns, maybe you ought to be. The Punch Group owes its bankers £4.6 billion pounds, secured against its estate of 8,300 pubs. Now when it gets to huge amounts of zeros, I get a bit confused, but it seems to me that is an average debt of £554,000 per pub. No wonder they are screwing their publicans and selling pubs as fast as they can. Not that it will do them any good. As the London Evening Standard remarked the other day "The group has bought back £318 million of debt for a bargain £200 million in the past six months. At 60p in the pound, that either shows investors think the company is doomed, or that they are so strapped for cash they are happy to take what they can get."
How did all this arise I hear you ask, when at the beer orders, most pubs were owned by brewers and more or less debt free? Well, when the pub companies were set up, each pub was mortgaged to pay the breweries for the pubs they had to divest. When pub companies subsequently merged or were taken over, a little bit more was added to the mortgage, with the surplus being trousered by those that sold them. Repeat quite a few times, until we get where we are today. A massive bloody debt that is being paid by the PubCos tenants - and, of course, by their customers. This couldn't go on for ever. Something would happen to stop it. Well a few things have. All at once. They are running out of mugs to take their leases, people aren't visiting pubs and the estate isn't worth what it used to be.
If Punch goes bust, there will be a fire sale of pubs at realistic prices. These pubs then, unburdened by huge debt, might just start to make money again.
The market says the group is worth £237 million. Latest figures indicate they "only" own 7371 pubs, so the debt per pub is actually worse.
A bit of a CV. Tandleman is a veteran beer lover, local CAMRA Chairman and activist, beer writer, beer reviewer and pursuer of all things good in beer. He lives in the North West of England and London. Despite his CAMRA membership, he does not limit himself to cask conditioned beer, though he believes that cask conditioning, when done correctly and appropriately, brings a quality to beer that is hard to equal by any other kind of presentation. He is a strong supporter of Northern methods of beer dispense and avidly detests poorly presented beer and dislikes pasteurisation. He regularly visits Germany, has conducted corporate British and German beer tastings for CAMRA at the Great British Beer Festival where he has worked for years on Biere Sans Frontieres and was Deputy Organiser at CAMRA's very successful National Winter Ales Festival in 2009, 2010, 2011 and 2012 and at the Manchester Beer and Cider Festival from 2013 to date. He admires good brewers wherever they are and has travelled extensively in pursuit of good beer to drink.
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