Eleven new Chef & Brewers for Punch

Punch Taverns is converting 11 sites from its Mill House Inns acquisition to the Chef & Brewer brand, chief executive Giles Thorley has revealed.

The company bought the 82-strong Mill House Inns business last September for £164m. Three hotel sites have been sold back to Mill House boss Ted Kennedy and a pub has been sold for an undisclosed price, with the remaining 78 sites split between the four segments operated within the Spirit managed business.

A total of 33 Mill House venues are being operated within the Value Food segment, where average food sales are 54% of £20,000 per week per pub turnover and average spend per head is £7.

The next largest number, 24 sites, are being operated within the Locals division where food sales are 19% of £13,000 per week turnover and average spend is £6.

Ten sites have gone into the City division where food sales are 23% of £15,000 per week turnover and average spend per head is £8.

Punch's Quality Food division currently sees 59% of £20,000 per week per pub turnover accounted for by food with an average spend of £11 per head.

Thorley said that the four segments give Spirit "a brilliant pipeline for future development of the Spirit business."

More generally, Spirit managing director Andrew Knight told City analysts that prices of drinks in the managed division had been increased in line with the Retail Price Index.

However, food prices had only increased by cost, except in the Chef & Brewer chain where prices had increased slightly in line with improved menu quality.

Knight said he expected that all Spirit pubs in England would have a smoke solution in place before the start of the ban on 1 July, although 50 pubs had seen planning delays.

In Scotland, Spirit's 20 pubs had seen a small decline in drinks sales and machine sales. However, progress had been delayed by problems in getting planning approval for smoking solutions at 10 of

the sites, a situation remedied in the first half of Punch's current financial year.

PUnch Redundancy consultation

Punch Taverns has informed business relationship managers (BRMs) and support staff in its tenanted division that it intends to start a 90-day consultation period on redundancies in the wake of the sale of 869 pubs to Admiral Taverns.

The sale, due to complete in the middle of this month, will mean that Punch will need an estimated 17 or 18 fewer BRMS and a reduction in the amount of support staff required at Punch's Burton headquarters.

The consultation will occur because pubs being sold are located randomly around the country, requiring a degree of re-organisation of the pubs overseen by individual BRMs.

Customer services director Francis Patton said the

company would be at pains to minimise disruption of

existing patches covered by BRMs because of the importance of relationship BRMs have built up with their licensees.

OFT scrutiny

The Office of Fair Trading (OFT) is inviting comments on the proposed joint venture between Punch Taverns, the quoted pub group, and Constellation Brands to take over ownership of Matthew Clark.

It is considering whether the deal will result in a merger, and whether it would result in "substantial lessening of competition".

Under the agreement, Punch and Constellation Europe will each become 50% owners of Matthew Clark, valued at £120m as part of the deal. Punch is investing £35m in cash from existing resources, with the joint venture raising about £50m, while Constellation Europe retains a £35m investment.