Marston's: 30 hosts sign up for new "Advance" agreement

The boss of Marston's tenanted division Alistair Darby has reported that 30 tenants out of a group of 60 licensees offered one of its "Advance" leases has taken up the offer.

The lease offers tenants the chance to buy beer at free trade prices in exchange for an increase in rent discounted immediately by a rate that assumes a 8% to 9% decline in barrelage, in line with projected figures for the market, over the next three years.

A pub with an annual barrelage of 200 gets rentalised on just 182 barrels — the effect of this is to create an extra £5,000 of income for licensees.

Darby told the Morning Advertiser​: "There is not an unlimited appetite for the offer — some licensees have not wanted further fixed costs in their business.

"The result shows a real spectrum of particular terms that people want running a pub. "What customers want is a range of options to choose from.

"It's clear that a number of licensees did not want, for example, to meet the criteria for Advance.

"We require, for example, that customers do their business with us on the internet and pay by direct debit so we can create greater efficiencies to recoup the margin we're giving up.

"Some licensees prefer to pay cash on order.

"It shows licensees want to run their business in different ways and there is no one-size-fits-all solution."

The Advance agreement attempts to incentivise licensees by providing an immediate £100 per week of extra margin. If licensees out-perform the market by maintaining their beer volumes or, indeed, increasing them, they retain the extra margin or else enjoy the benbefirt of generating a lot more margin.       

Commenting on the launch of the new agreement in July, Darby said: "There will always be a limit to what we can do, support-wise, so we looked at how we could make licensees better off without collapsing the profitability of the group as a whole."

Marston's has split its tenanted estate into two groups — a group of some 1,350 pubs called Apollo and a second group of around 350 Phoenix pubs.

The Apollo units, which are performing more robustly, will have one BDM for each 60 pubs, up from around 45, and the Phoenix estate will have one area manager for ever 25-30 pubs.