Punch Taverns commits to RPI-related rent decrease

Punch Taverns has guaranteed it will match any move by the retail prices index (RPI) into negative territory with a reduction in rent for its lessees.

As well as the RPI assurance, Punch has said it will delay increasing its own wholesale prices until after the Budget. It would also look to give any of its lessees the opportunity to buy their pub's freehold if such a sale benefited both sides.

Roger Whiteside, the former head of off licence chain Threshers who was appointed head of the pubco's leased pub division last November announced the moves as he marked 100 days in the job.

He said the group would pass on any decrease in RPI to its leased pub operators.

"We're not required to pass on any decrease but we anticipate doing so when RPI heads into negative territory," he said.

"This is a matter of principle. We want to be seen to be being genuine and fair to our customers," he said.

Whiteside also said Punch would delay any wholesale price increases across a range of products until the end of March.

"We're going to restrict the price rise when it does happen to around four per cent across the board where we have been landed with a price rise ourselves," Whiteside added.

"This means the gap between our wholesale prices and those of the brewers is widening," he added.

And while Punch has offered to sell the freehold interest in the 500 pubs it has earmarked for sale to then sitting lessee, Whiteside said that any Punch lessee could table an offer to buy the freehold of the pub they operated.

"In addition to the 500 pubs up for grabs we've had a further 100 lessees from outside that group contact us to enquire about buying their pub," he commented.

Acknowledging that Punch was committed to selling pubs to raise much-needed cash to pay down debt, Whiteside was keen to stress the proposal was not signalling a fire-sale.

"We don't want time-wasters. Any deal has to be right for us and the lessee. We see this as a window of opportunity for both sides. But it won't stay open forever," he said.

Whiteside stated his absolute commitment to the leased pub model. "We offer a wide range of support for our lessees," he said.

"This is a low cost entry route into the pub trade. Yes, there are tensions between a landlord and tenant in such businesses, but this is a partnership relationship where both sides are seeking a win/win situation."