Now that might seem a strange accusation for a pubco to face, but there are people both inside and outside the pub trade who believe that property pubcos (by which I mean those that own tenanted/leased pubs but have no brewing operations) are bad guys.
These same people are less critical of managed pub estates, and they seem positively enthusiastic about brewery pubcos — especially those in family ownership.
There’s something cuddly and paternalistic about family-owned brewing pubcos — right? Traditional values, people before profit, continuous investment in real ale etc. These are the companies we’d trust with the future of the pub estate.
Well, there are some great family-owned brewing pubcos out there, doing wonderful things with their pubs in partnership with happy tenants and delighted customers. And benchmarking studies confirm that in general brewery pubco tenants are happier than their property pubco counterparts.
But there are also some great success stories out there in the property-pubco estate. Sadly for the big PLC pubcos, these stories are often lost amid the tales of woe from pub tenants whose pubs are failing and whose relationships with their pubcos have gone wrong.
It’s convenient to scapegoat these companies, but it makes no business sense for pubcos to suppress the success of tenants. Every tenant failure costs them tens of thousands of pounds.
None of the big property pubcos would admit they are perfect. But some are making great efforts to improve the quality of licensee they attract, to improve the fabric of their estate, to develop partnerships with tenants in the real sense of the word, and to ensure tenant profitability is a key measure of their own success.
They also provide an eye-swivelling choice of beer to their licensees — much more in fact than any brewery pubco will offer its tied tenants. Go to a property pubco roadshow, or browse its price list and you’ll find huge variety. One property pubco revealed that cask ale represents 20% of beer sales across its estate — well ahead of the national average.
OK, so they are selling pubs they can’t make work, and some are being developed for alternate use, but some are being bought by independent licensees keen to prove that they remain viable.
There’s a simple supply and demand dynamic at play in the pub market. Demand is not high enough to meet the current level of pub supply. We’d all like to think that we can raise demand for the services pubs provide, rather than reducing supply to meet the current levels of custom.
But until or unless that happens, I’d rather celebrate the general raising of standards across a slightly shrinking estate than cling on desperately to a failing tail of pubs that don’t meet anyone’s needs.
By all means give property pubcos a hard time when they behave badly. But let’s give them credit when it is due, visit their pubs, drink their beer and support their tenants.
This article first appeared in the June issue of CAMRA’s What’s Brewing magazine