Pubco model begins to evolve

One of the really interesting aspects of what Greene King has launched this week (Greene King's brave new pubco model​) is how it's seeking to help licensees compete better against the managed chains.

Highly conscious of the value offers created by the likes of Mitchells & Butlers, JDW and Spirit, Greene King Pub Partners MD David Elliott wants to offer more ammo to his licensees to fight back. He's already served up some tasty cut-price drinks offers for nearly 200 of his pubs, and that's now being extended to perhaps 300 more.

But, perhaps even more importantly, he's freeing up more of his BDMs' time so they can get really close to their licensees and work with them to develop their business offer to compete against the managed pubs. Each will now have 16 fewer pubs to watch over — at just 44 pubs per BDM, it's probably an industry record for big groups.

The initiative will be a real test of just how much value good BDMs can offer, and will be watched with massive interest. It will also be noted keenly by the politicians conducting the new pubco inquiry, which starts shortly (18 November). In the last inquiry, pubco chiefs made much of the help their BDMs offered licensees and claimed it was part of the deal a licensee was paying for when he handed over his rent and beer money. Yet as the MPs acerbically noted, the quality of BDMs across the industry ranged from the "excellent to the dire".

Quality of BDMs​

That was one of the reasons Nick Bish, the Association of Licensed Multiple Retailers' chief executive, was so keen to develop BDMs through top-level management courses at the world-famous Ashridge Business School. And why many enlightened companies such Enterprise, Punch, Greene King and Marston's, plus others, have been so supportive of his efforts.

Greene King's BDMs have always enjoyed an excellent reputation for seeking to help their licensees. It will be fascinating to see what further steps they may now take. If there is a marked improvement in the fortunes of Greene King licensees, it will be hard for other pubcos not to follow suit. And that, as MA has consistently argued, would be the kind of progressive partnership thinking this industry badly needs. Elliott describes what he's doing as "the evolution of the pubco model," and it certainly looks a big step in the right direction.

Encouragingly, there are signs that other pubcos are looking to evolve too. Enterprise has been creating a new type of BDM for the past few years — the fact one of its people won top prize in the recent ops manager awards is no coincidence. It has been getting far closer to its multiple operators. And County Estate Management insists free-of-tie is a workable option.

If these and other new measures help foster healthier relations between pubcos and licensees, that's a massive silver lining glistening amongst these awful clouds of recession.