The legacy of Inntrepreneur

Opinion is divided on whether Inntrepreneur's changes were good or bad, but no one can argue that its impact hasn't been far-reaching

Everyone agrees that Inntrepreneur changed the landscape of the UK pub trade, but there is debate about whether this has been for better or worse.

Iain Jackson, estates director for Marston's Pub Company, says: "If you look at the terms of the leases today they're far wider and they're a lot more flexible compared to the old Inntrepreneur leases.

"Rent reviews can now move upwards and downwards. We also put a lot more benefits into the agreement in terms of discounts.

"If you tried to put an Inntrepreneur agreement into the marketplace today it wouldn't work because it's unfair to the tenant, but it had its time and place 20 years ago. Some of the clauses were particularly tight and didn't work."

Phil Dixon is dismayed by the way leases have changed the character of licensees. "You can't get entrepreneurs into tenancies, but you can get them into leases. Which is fine, but that's not why the majority of people want to work in the pub sector," he says. "You're foisting upon people a concept that says there is money in this, but only if you get out.

"In its crudest sense, you take on a run-down pub, invest in it, and sell it off after two years. You can only really make money if you take a lease with an exit strategy in place."

Consultant David Kelham, formerly with Allied and Nicholsons, describes leasing as "a mixed blessing". "It's released flows of funds into the market, which has ramped up the price of property and allowed some quite innovative investment in particular sites," he says.

"But overall it's diminished choice; it's destroyed some of the local fabric of our communities. On balance it's not a particularly positive picture.

"Leases were initially about a long-term view. Now it's more about a three-year turnaround: get out before the review and sell it on if

you can.

"We thought the only place for leased pubs would be little country houses where they were run as a

subsistence option — that was the expectation up until the mid-90s. People didn't appreciate it was a revolution.

"The managed house has lost. It has an ever-increasing cost base

and inflexible business models. The battle has been won by the tenancy and lease model, but it's not necessarily of benefit to people in the trade — or the consumer."

Ken Newton is one of many who believe leases are in many cases more demanding than ever.

"What we have now is the likes of Enterprise and Punch letting pubs on long terms, but fully tied for beer, wines, spirits and minerals, taking back half the fruit machine income, installing beer-flow monitoring equipment in the cellar and im-

posing annual indexation on the rents, which I consider is totally unjustifiable.

"With RPI now in excess of 4%,

this is hurting many tenants. I be-lieve we should all revert to the old fixed rent for a five-year period where at least the tenant knows where he stands, as rent is always

the highest fixed cost in running

any leasehold business. Some of the other regional brewers are now letting their pubs on longer leases with RPI on the rent."

Alan Temple feels sympathy for today's leaseholders. "They have got a hard life. They have got it worse," he argues. "Because of the victory Inntrepreneur had, all the others benefited. Now you've got two major pub operators throughout the country, there's no question it's a monopoly, Enterprise and Punch have got 20-odd thousand pubs between them and there's only 40,000 in the country."

But Iain Jackson believes pub operators have learned that time never stands still. "I think the lease market will continue to change — it has to, constantly," he says.

"It's having to be re-looked at every six months. It's becoming very cyclical, very fast.

"You can't just say now with an agreement 'job done' and stay with it forever. You've constantly got to adapt it, make it more user-friendly and flexible."

What do you think?

If you were part of the licensed trade in the late 1980s what are your memories of those turbulent times?

With the benefit of hindsight, do you think the Inntrepreneur lease was a good or a bad thing for the trade?

What are your opinions on present-day pub leases?

Let us have your views: call Noli Dinkovski on 01293 610457 or email noli.dinkovski@william-reed.co.uk