Blog: pubcos have ripped heart out of industry

One of my father's most repeated sayings was "actions speak louder than words". It could not be more appropriate in the pub game.

Once you have decided to do something — just do it. I noticed with my father and other successful publicans I have met over the years, that if you do something straight away, you get more done.

So the successful ones do have very busy pub lives but also seem to have time for their families, do lots of charity work, play a fair amount of sport and have holidays. The failures just do a lot of talking.

As my father's business developed and we moved to bigger and more profitable pubs — the living that he made was sufficient to support all the boys through school. We all benefited from a grammar school education and we all did varying forms of post school education.

We were fortunate to go to a great school and then in 1964 I won a place at Sussex University — the lure of the old town was too great — and did a degree in Economic History. All the while working in my Dad's pub during holidays.

Ludicrously high rents​

What seems clear looking back — was that from the earliest tenancy, through to the bigger tenancies and the manged house until he bought his first freehold — there was sufficient money to live a pretty comfortable life.

In recent times the idea that there is enough money in pubs seems to have disappeared. Pubs are closing at a greater rate than ever. The pubco sector is being devastated by a combination of ludicrously high rents, unbelievably expensive beer and diminishing overall demand.

I am reminded of this as I ponder the paradox of the current equivalent of the old brewers — giving us their views on the trade and the people in it. Of course in the old days the family brewers managed to keep their views pretty much to themselves. They were too busy doing anything other than worrying about pubs.

I keep reading from the new owners that the "pub model is not broken", that "our lessees are making more money this year" and that "we are not going to go bust, the model is intact and healthy".

But as my dad used to say "actions speak louder than words".

Pubco behaviour​

So how have the owners of the major pub companies behaved. Doing a bit of research I have noted that the directors of the main pubcos have sold between them about £50m of shares between 2000 and 2006. The share prices are now a fraction of their former levels — both of the main pubcos shares are more than 90% off their peak.

Surely given the protestations as to the robustness of their model — now would be a great time for them to be snapping up the shares.

But no — not a single purchase. Indeed in recent times the two leading lights have exercised Long Term Investment Plans and taken even more money out of their companies.

On the basis that actions speak louder than words — they are telling us that the pub model is indeed dead, that both companies are going bust, and they are getting all they can out before the ships sink.

One recently vented his fury at their lessees "buying out" — maybe with so little money in these pubs anymore — their actions are also indicating the truth. These top guys have ripped the heart out of the pub game, have squandered a great opportunity to update pubs — and through their greed have killed the golden goose.

Sir Shannon Alberry is the owner, chef, head barman and principal pot wash at The Bloated Toad — a freehouse in a leafy English suburban town.​