Pub tenants foxed by debt

Effects of the bad weather, smoking ban, rising beer duty and rent are overwhelming

Sandra and Gary Higginbotham left the Old Fox on Tuesday. They could have stayed for a few more weeks, but then they faced the indignity of being evicted by bailiffs acting for Punch Taverns.

"Rather than give them that pleasure," Sandra told me on Sunday, "we're spending the weekend packing, instead of serving beer. We'll hand the keys over on Tuesday. Good luck to anyone who takes over the pub after us."

The Old Fox stands in School Lane, a quiet country cul-de-sac in the village of Bricket Wood, in Hertfordshire, between St Albans and Watford. The Higginbothams sank their life savings into the Old Fox. It had always been their dream to run a country pub — but that dream turned into a nightmare.

They ran up rent arrears of close to £13,000, and in June Punch issued an eviction order. At the end of July the local court rubber-stamped the Punch eviction and gave the Higginbothams 28 days to either pay the arrears or leave the pub.

The level of debt made repayment impossible, so the couple said goodbye to the pub on Tuesday. Sandra asked: "How can Punch charge £30,000 a year in rent when in the winter we weren't banking £800 a month? The company did lower the rent in the winter, then put it back up in the summer — and this summer has just been a waste of time."

The Old Fox has a large beer garden and children's play area but they have been closed for much of the summer as a result of bad weather. It's the second poor summer in succession and rain, the smoking ban and the recent duty increase on beer have combined to affect sales in the pub badly.

Business was so slow that Gary was forced to take on a full-time job, leaving Sandra and their daughter Charlotte to run the Old Fox during the day. As a result of the rent arrears, Punch withdrew the Higginbothams' credit facility, a vital lifeline on which all licensees rely to buy beer.

"Punch would only supply us with beer if we paid £1,000 or £1,500 up front," Sandra said, "and we didn't have the money". During one busy weekend early this year, the Old Fox ran out of beer, and Punch only delivers from Monday to Friday. The Higginbothams were forced to go to another supplier for beer — and as a result were fined £1,000 by Punch for breaking their tie agreement.

Sandra and Gary claim they have not spoken to Punch since June in spite of numerous attempts to contact the pub company. But Punch will have been busy this week finding replacement managers to keep the pub running.

There is another side to the modern pub story in the same village. Peter Dillingham, who runs the Black Boy, in Station Road, says the pub is thriving despite a four-month closure last year, when it was flooded during the summer storms.

Dillingham says his success is due to one simple fact: the pub is a genuine free house, owned neither by a brewery nor a pubco. He doesn't pay rent and can buy his beer at the most competitive prices.

"The pubcos are killing the game," says Dillingham. "They are strangling it. Your local is likely to become a block of flats or a small housing estate. My drinks are cheaper because I only pay around half of what the pubcos charge their tenants for beer."

Punch Taverns denies it has not contacted the Higginbothams at the Old Fox.

A spokesperson said: "We have an extensive support package in place and have a strong track record in building sustainable local pubs that are at the heart of the communities they serve. It is not in our interests to see our pubs fail.

"All rents are based on a fair maintainable trade agreement, which is estimated on the turnover an average licensee could generate in a particular outlet."

But something has gone badly wrong at the Old Fox. Punch's support package and trade assessment seem to have gone awry. Sandra and Gary Higginbotham have lost their life savings. With their debts, their losses amount to £70,000.

At the weekend, when I first contacted the Higginbothams, Sandra answered the phone by saying poignantly: "The Old Fox". By the time you read this, she can no longer say that. Gary and Sandra have lost their savings, their pub and their livelihood. Their dream lies shattered at the end of School Lane in rural Hertfordshire.