Martin: pubco model is unsustainable

JD Wetherspoon chairman Tim Martin says the pubco model is "unsustainable" because tenants are charged too much for beer.

Tenants can't compete with prices charged by supermarkets and managed operators and pub companies have "lost control" of their licensees, claimed the Wetherspoons chief.

The managed operator is famously selling Greene King IPA for 99p among other cut-price drink and food promotions from January.

This has fuelled anger among pubco tenants who say they are unable to compete with the prices, which are often less than what they pay their pub company.

Martin told the MA: "It's a fact of life that you don't have complete control over the rent, but the problem with [pubcos] leases is that in effect landlords can charge whatever they like for beer.

"I don't think, long term, leases from pubcos are sustainable.

"The pubcos now are between a rock and a hard place because they have taken on so much debt and if they don't change what they charge for beer they are stuffed. I think now they have lost control of their tenants.

"It seems to me that a lot of people have taken on these leases and find themselves investing their savings in a business that isn't profitable."

Martin also said it was "perfectly fair" for people to campaign for the removal of the beer tie.

Wetherspoon chief executive John Hutson told the MA yesterday that sales of 99p IPA had been "very good" and helped the company report a 6.4% rise in like-for-like sales in the two weeks to 18 January.

Welcome support​

The Fair Pint campaign welcomed Martin's words. "Tim Martin is one of the biggest players in the pub sector and we welcome his support for our campaign," said founding member Steve Corbett, also licensee at the George Canning in London.

"As he points out, pubcos can charge what they want for beer and many lessees are being forced out of business by the prices which the pubcos are charging their tied pubs

"The Fair Pint Campaign has hundreds of examples of people who have sunk their life savings into a tenanted pub only to find that they are unable to make a living due to the unfair supply arrangements with the pubcos.

"Hundreds of pubs are being forced to close across the country due to way in which the pubcos run their business. These unfair ties must be removed if the British pub is going to survive."