A happy breed?

Big changes in the industry over the past thirty years and a new kind of relationship between landlord and tenant have produced a different type of licensee, writes Phil Mellows.​

Craig Cash's brilliant sitcom Early Doors, the second series of which is currently being repeated on BBC, is set in a pub called the Grapes, a backstreet tenancy in the vicinity of Manchester populated by a shambolic, though small, crew of regulars plus Ken, the miserable licensee.

In the opening shot of the first episode, Ken is seen "tipping" - pouring a cheap spirit into the bottles of an expensive brand - and the scene is set for arguably the most authentic fiction of pub life ever written.

Except that in the 21st century Ken is one of a dying breed, a virtuoso of the grey economy, a ducker and diver surviving on the borders of legality. But only just surviving.

The second series finds him in financial trouble with the brewery on his back and he is close to giving it all up. In a desperate attempt to boost trade he tries quiz nights, outings and a moderately successful karaoke evening.

But he's running to stand still. While the regulars greet his schemes enthusiastically their numbers aren't swelled and in the kitchen Phil and Nige, two dissolute officers of the law, are drinking his profits in payment for turning the occasional blind eye.

Thirty years ago most publicans were Kens. Being a pub tenant was always, for most, a marginal existence in business terms. The perks, legal and illegal, were part of the deal and if you worked the shoddy system right you could make a decent living. The brewers that owned most of the pubs just let their tenants get on with it as long as people were still drinking their beer.

It was also the heyday of trade protection. Licensed Victuallers' Associations thrived, as did tenant streams - organisations of licensees who shared the same landlord. In those days publicans combined to defend a common interest, a bit like a trade union but without very much socialism going on.

Unless you were unlucky enough to be targeted by one of the more impatient protection rackets, the biggest fear of any tenant was that they became too successful.

If you got noticed by the brewery there was a danger that when your three-year lease came to an end your pub would be creamed off for the managed estate and that would be that. Then, a couple of years later, you might go back there and find it converted into a "fun pub".

There are some of you who would argue that things haven't changed too much, and it's true that there are still plenty of Kens about. But the end of the 1980s saw the beginning of a radical change in the way pubs were run that was not going to be reversed - a change that would see the birth of a quite different kind of publican.

No single reason​

It's difficult, and not particularly enlightening, to pick a single event that precipitated this change. You might choose the Supply of Beer (Tied Estate) Order 1990, quickly dubbed, with modest wit, the Beer Orders, which forced the big national brewers to collectively dispose of some 11,000 pubs and rethink the way they do business.

Or you can go back a year to the publication of the Monopolies & Mergers Commission Report on its investigation into the tied house system, which more or less warned everybody what was coming.

Or if you wanted to be more controversial, you could pick 1988 and the debut of the Inntrepreneur lease.

If asked which person you think has had the greatest impact on the pub industry over the past three decades, you could plump for any one of many obvious names. But what about Allan Sheppard?

In the late 1980s, Allan Sheppard was chairman of Grand Metropolitan, the company that owned the Watneys pub estate. To put it kindly, Watneys had already been at the cutting edge of developments in the pubs and brewing industry.

The name today is probably most readily linked to Watneys Red Barrel, the heavily marketed keg bitter that became the main focus of ridicule by the real ale movement. In the 1970s, Watneys painted all its pubs red and hung little red barrels on all the signs. It had just finished the whole estate when it had to take the barrels down and repaint the pubs because, it admitted, the risible image of Red Barrel was losing it custom.

Anyway, as the boss of a proper corporate giant Allan Sheppard was not too keen on the Kens and their Spanish practices. It wouldn't be financially viable to take all these marginal pubs into management but on the other hand the traditional tenant was not the kind of partner that was going to grow your business, being happy to duck and dive and generally tick along.

But what if you had a different kind of agreement with them, say a 20-year fully repairing assignable lease? They would pay more for it but they would, in theory, have a greater interest in developing trade with the promise of selling it on at a profit after a few years.

There would still be the tie, of course, they would still have to buy beer and other products off you, and as their sales grew you could make a good profit out of that, as well as putting the rent up.

Even better, you could get out of brewing and use the purchasing power of a large pub estate to drive down beer prices and increase your margins even more.

So that's what Grand Met did, contriving a pubs-for-breweries swap with Courage a company which saw its future as a competitor in the global beer market.

And over the next decade that's what all the major brewers did, grumpily chivvied along by the Beer Orders which, from this perspective, looks like no more than a piece of retrospective legislation. Inntrepreneur was the cast for the business model that now dominates the industry.

Thanks in part to a badly-timed recession Inntrepreneur itself was a disaster, of course, and the case of Crehan v Inntrepreneur grinds on like Jarndyce and Jarndyce in a kind of Bleak Public House. But that's another story.

All change​

For the Kens of the trade, business was never going to be quite the same again. The long lease, in more sophisticated forms, has indeed encouraged entrepreneurs into the pub industry and many have been successful. You can still get a traditional three-year tenancy. The family brewers have dug their heels in over that. But anyone running a tenanted pub today has to operate in a tougher competitive environment, hamstrung by regulation and supervised by a landlord who has the technology to make sure they can't even buy out of the tie.

If Ken is going to be able to make a go of the Grapes he'll need to introduce sound, legitimate business practices and target new consumers with a marketing plan. And if his brewer was on the ball it would be helping him do it.

It won't make much of a sitcom but there might just be a chance of bringing a smile to his face.

Pictured: Early Doors licensee Ken (played by John Henshaw) - a dying breed?​