Give licensees a fair chance

It must have been a sweet moment for Fuller's when it picked up six plum pubs from Punch last week.

Not so long ago, when pubs came on the market, the national pubcos would have snapped them up instantly. And at prices far higher than rival bidders at the regional brewers thought prudent to afford.

Now Fuller's, Adnams, Sheps and, no doubt, many others, who grumbled at the exorbitant prices paid then, are having the pleasure of taking them off Punch and the others at distressed prices.

In the sale last week, when, among others, the iconic Red Lion near Parliament went to Fuller's (and let's now hope it's quickly restored to its former pomp and MPs who use it can be made to respect all that's great about the trade), there was much speculation about the implications of the sale for the value of Punch's estate.

By selling at 17% below book value, was not that an indication that the whole estate's value must be 17% lower now than at its last valuation?

Maybe. It, of course, depends on when Punch bought the pubs in the first place and for what price. The truth is that in this market, it's hard to decide what any pub is worth. As ever, some buyers may be prepared to pay more than others for something they could perhaps do more with than their rival bidders.

But this question of valuation is proving intensely frustrating for Punch licensees who are keen to take up Punch's offer to sell them their pub. It seems many are acting in good faith, getting an independent valuer to determine a fair price — only for offers to fall far short of Punch's expectations.

Though there may be some individual licensee deals we've not heard of yet, the people who seem more likely to walk away with a Punch pub at the moment are multiple retailers whose business structure, and the synergies that follow, allow them to pay more than individual licensees.

Clearly, Punch has no obligation to give its pubs away. But having invited its lessees to make an offer, it has a moral duty not to let them waste their time and money making doomed offers.

Punch must also be fully aware that the banks' loan-to-value rules at the moment are making it very hard for tenants to raise cash. Surely some deal can be worked out with eager tenants?

The same should apply to the thousand-odd Scottish & Newcastle Pub Enterprises' licensees, whose pubs are being sold by Royal Bank of Scotland at the moment.

Given that the Government owns the majority stake in these pubs, why don't ministers order this bank to sell the pubs to any interested licensee? And provide the licensees the kind of soft-loan terms that it's offering to other parts of British industry.