Pubcos offer concessions

It was unclear last week the extent to which rival pubcos were prepared to follow Admiral Taverns' lead and offer sizeable rent concessions to pub tenants badly hit by the smoking ban.

Admiral's move was highlighted last week after City brokers Morgan Stanley had hosted a round-table discussion with the pubco's major shareholder Gary Landesberg and joint chief executive Lynne D'Arcy. Landesberg told analysts the group expected to offer £5,000 rent concessions to those of its landlocked pubs that would be hardest hit by the smoking ban. Morgan Stanley equated this to slicing around £1.3m, or one per cent, off the pubco's profits.

D'Arcy said Admiral was merely taking a "realistic" stance in offering such financial help to the 10 per cent or so of the group's pubs - around 270 - that had no outdoor space to accommodate smokers. "We're building a sustainable business. If someone thinks they are going to suffer under the ban and they put a case for repositioning their business then we'll look at helping them," D'Arcy said. Precise details of the £5,000 concession were being looked at, she added, though it wouldn't be "cast in stone".

Francis Patton, customer services director at Punch Taverns, said his company had already offered financial help to tenants in Scotland on a pub-by-pub basis and would look to do the same in England. "If they've worked with us on smoking solutions and are still suffering then we'll help them out," he said.

Paul Howarth, retail director of Yorkshire brewer Daniel Thwaites, which has more than 360 tenanted pubs, said the company had invested £4m in smoking solutions and worked closely with tenants in the run up to the ban. "We're sensitive to our businesses' needs and we'll take a view after Christmas if any further assistance is required by those few pubs that are badly affected."

Stephen Oliver, managing director of Marston's Pub Company, said his pubs had seen significant investment aimed at minimising the impact of the ban: "But if tenants for whom there is no solution are badly hit we will consider a temporary rent cut to help tide them over, as we did during the foot and mouth crisis a few years ago."

A spokeswoman for Kent brewer Shepherd Neame said: "Rent negotiations are kept confidential between us and the tenant. It's too early to say whether rent concessions will be required and we'll be reviewing the situation once the ban comes in."