Tuppen: we have not misled tenants
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Enterprise Inns chief executive Ted Tuppen refuted claims that his company had misled tenants at yesterday's Business, Innovation and Skills Committee hearing.
Outspoken BISC member Brian Binley attacked Enterprise over rents, telling Tuppen: "The truth is I think you have been misleading incoming tenants for a long time."
He highlighted Enterprise's interim results that said its tenants face costs of around 35% of turnover. He contrasted this to a survey, highlighted by independent surveyor Garry Mallen at last week's BISC hearing, of 700 pubs carried out by the pubco that put the figure between 42% and 51%.
Binley said Enterprise tenants have told him that "on every occasion" they were quoted costs of around 35% and "on every occasion" they were "significantly higher". "I would read the letters but I think they would embarrass you."
The MP added: "On every occasion the tenant went in on a promise. Your middle management gave the wrong information. That's the fact of the matter again and again and again."
Tuppen said only 137 of the pubs surveyed were Enterprise sites. He added: "I disagree completely that I have misled tenants."
BDMs
Binley accused pubcos of not training business development managers to understand the updates guidance on rent setting from the Royal Institution of Chartered Surveyors (RICS). "I've had meetings with BDMs where their knowledge of rents is almost non-existent," he said.
Tuppen defended Enterprise's approach, saying it employs 30 RICS-qualified individuals, or 7-8% of the work force. "There's plenty of RICS knowledge and experience," he said.
He said no rent or profit and loss account is signed off without a RICS-accredited valuer — this policy has been in place since September 2010 — although he conceded that "very few" BDMs have RICS accreditation.
Later, Tuppen said PIRRS had "made a huge difference for the good of the industry". He joined other pubco chiefs in welcoming the idea of expanding the principle to a general mediation service. Twenty one of the 27 cases referred to PIRRS so far have been Enterprise licensees, but Tuppen said this was a "positive" thing because the company is keen to ensure tenants know the service is available.
The pubco chiefs were asked to rate their performance over the past year in terms of the continuing reforms. Punch boss Roger Whiteside said: "Probably seven out of 10."
Simmonds concluded: "We have improved transparency and been a positive force for good but we're not there yet."