Charity: Hard times are testing us all
The cost of living has risen fast for everyone, but it's an even tougher year for the average licensee.
The average annual post-rent income, excluding the live-in benefit, has dropped by 15% to £24,180, according to a Morning Advertiser survey of 500 licensees.
The industry is going through its most difficult year since the early 1990s.
No one, not even the best-positioned managed operator, is immune from today's declines in beer volume. Current economic conditions are causing a polarisation in performance between good pubs and poorly-positioned pubs.
Some really poorly-positioned pubs will close.
But let's not forget the positives.
Those pubs owned by the major quoted tenanted operators are the survivors of years of churn and overwhelmingly produce decent earnings.
Unlike the average UK retailer, the tenanted pub owner shares some of the pain of a downturn through declining beer income.
The major tenanted companies are much better managed than was the case in the last downturn in the early 1990s.
They are far more closely attuned to the real problems that might crop up during these testing times.
They have become, for example, much more skilled at supporting licensees through their first year in the trade. Some pubs, let's face it, need to close because they have become unviable.
Another tranche of pubs and licensees needs sympathetic support this year. Some will regard Punch's decision to insist that its business development managers (BDMs) focus on their pubs for two months as a sign that performance has taken a turn for the worse.
Others will think that it's a sign of a responsive management quick to prioritise the needs of hosts in testing times.
Last year, Greene King — pioneer of all manner of innovative tenant support — placed 150 underperforming pubs in the hands of its best BDMs for intensive management. The results show, according to the industry grapevine, what a difference imaginative pubco support can make.
Hard times are testing us all
Why is it that top national journalists have such a poor grasp of how the pub industry works now?
News rottweiler Jeremy Paxman, in his book, The English: a Portrait of a People, referred to JD Wetherspoon as a brewer.
Now Ian Jack, regarded as one of the finest journalists off his generation, blunders around in an essay on the pub in The Guardian.
Jack reports: "In 1989 the Government decided to break up the monopoly that operated when brewers owned or leased 80% of Britain's pubs.
"The result was the 'pubco', companies such as Punch or Enterprise, which owns chains such as Harvester or All Bar One, a new tier of owners and managers between the brewers and the customer."
Is it time for a British Beer & Pub Association teach-in?
