Tuppen and Thorley say pubco debt is not a problem

Bosses of the UK's leading pub operators today emphatically denied their companies' massive debts were putting the institution of the Great British Pub at risk.

Appearing this morning before the Business & Enterprise Committee review into the pub trade, held in Westminster, Ted Tuppen, chief executive of Enterprise Inns, rejected claims his company had been "reckless" in running up debts of £3.6bn.

Asked by Julie Kirkbride, Conservative MP for Bromsgrove, whether the sort of debt structures built up by the likes of Enterprise were threatening the economic and cultural future of the country's pubs, Tuppen pointed out that his company had assets worth £6bn, with debts of around 60 per cent of their value.

"The recklessness comes from borrowing in excess of 100 per cent of a property's value," he told MPs. "If I went to a bank and asked for a 60 per cent mortgage I'd be looked on rather favourably. That is our position. The numbers are large, but then we are a large company."

Giles Thorley, chief executive of Punch Taverns, the UK's largest pub operator, said his group's debt was around the £4.5bn mark, while Punch's pubs were worth £6bn.

"Ninety five per cent of that is long term and has been at the same level for the last four or five years. Plus we are taking steps to reduce it," he added, alluding to the group's scrapping of an interim dividend recently to pay off debt.

Questioned by MPs over failing pubs and support for licensees, Simon Townsend, Enterprise Inns' chief operating officer who was also appearing before MPs, admitted some 800 of his group's pubs were in what he called "intensive care", receiving some £1.3m in financial help a month.

Townsend said contrary to some reports, temporary financial support offered to licensees "was not repayable. It's defined assistance to prevent business failures".

Thorley said around 1,800 Punch pubs were "receiving some form of rent concession or beer-related discount".

The Punch boss also said the suggestion that his company "seduced" potential licensees into the trade via slick marketing on its website in order to part them from their savings was "really quite extreme. It just doesn't happen".