Somewhere in London…
“Ah, Bond, come in. Have a seat.”
“What’s this all about Sir?”
“What do you know about the tied pub trade 007?”
“Not a great deal. Four Select Committees were convened to look into the pubco tenant relationship; all identified glaring irregularities. Primary areas of concern included insurance, accuracy of beer monitoring equipment, inflated dilapidations, sky high beer prices, the AWP tie and a failure to provide either guest ale provision or substantive countervailing benefits.”
“Anything else?”
“Inadequate training for new tenants entering the trade. It’s a fact that anyone considering taking on a McDonalds franchise is required to undertake 9 months of intensive training. By contrast, it seems a couple of days are more than enough to equip people with the skills necessary to run a pub.”
“I see you’ve done your homework.”
“Let’s not forget the lack of transparency surrounding prices. Have you tried getting a drinks price list out of a pubco recently?”
“Can’t say I have.”
“And while we’re on the subject of pubcos, let’s not neglect the issue of inflated rental premiums.
“Well thank you Bond. I think we’ve got the picture.”
“With due respect Sir; the industry is trying to make people believe that PIRRS is the solution to the problem. The reality is that it’s nothing more than a mechanism designed to ensure things are kept in-house; enabling pubcos to make ludicrous rental demands.
Of course, when scaled down during the course of the arbitration process, it gives the impression that the tenant has obtained a good deal. The fact of the matter is that pubcos are seeking to drive rents up at a time when volumes are going through the floor.
It simply isn’t sustainable. But then again, when did pubco personnel take a long-term view of things? Most can’t think beyond their next bonus date.”
“So you’re not convinced the codes will address these issues?”
The codes are nothing more than a smokescreen, a cynical attempt to conceal one undeniable fact; life for the tied tenant is in a downward spiral.”
“What leads you to this conclusion?”
“Take a cursory glance at the ‘new’ agreements on offer. Managed tenancies? Franchises? Retail agreements? In the same breath pubcos emphasise the need to attract entrepreneurs to the trade. A glaring contradiction I’m sure you’ll agree? If pubcos want managed houses why don’t they employ managers?”
“I think we both know the answer to that Bond.”
“The fact of the matter is that these agreements do little to address the imbalance in risk and reward that currently exists in the pubco/tenant relationship. In fact they tilt the balance even further in favour of pubcos.
What’s all this about anyway Sir? The pub trade isn’t exactly our area, is it?”
“Well, it seems government have got themselves into a bit of a pickle over this. A number of Ministers are furious that they appear to be backtracking on Select Committee recommendations. They’ve asked us to intervene.”
“I thought Eric Pickles made it clear that if pubcos didn’t get their house in order they’d feel the cold dead hand of Whitehall on their collar.”
“That was just Eric being Eric. Jo Swinson has since confirmed that government have all but washed their hands of the matter.”
“So what do you want me to do Sir?”
“We want you to meet up with Ms Swinson; convince her of the need to meet with representatives of the IPC. They’re concerned she’s only hearing one side of the story. Tomorrow evening Jo will be attending a U2 concert in Hamburg; followed by a dinner party hosted by Bono at the Hilton Hotel.
All the details are in this envelope. See Moneypenny on your way out; she’ll give you your tickets.
Good luck James. The destiny of tied tenants lies in your hands.”
The Hilton Hotel: Hamburg
“Ms Swinson, isn’t it?”
“Yes. And you are?”
“Bond, James Bond.”
“Ohh...I’ve never met a secret agent before. Are you going to seduce me or kill me?”
“Neither actually. I need to talk to you about the pub trade.”
“I’m sorry?”
“Look, we can’t talk here; the place is crawling with BBPA agents. I’ll meet you in your room in 10 minutes. What’s your room number?”
“129.”
Room 129
“What’s all this about James? And what’s in that briefcase?”
“The tools of my trade. Foie gras, Beluga caviar and of course the obligatory bottle of Bollinger 86.
Now then Jo, let’s get down to business. With 18 pubs a week closing we don’t have much time. We need to be clear about one thing from the outset; self regulation will not work. You only have to look at the banking sector, the press and err… Westminster to see that. Left to their own devices, people will always look after number one. Trust me, the drinks industry is no exception.”
“But James, the BBPA have assured me they’ve addressed the concerns of the Select Committee.”
“Really? I assume you’ve received cast-iron assurances that they’ll stop inflating dilaps?”
“Inflating what?”
“Have they given you a viable definition of the term REO?”
“REO?”
“Offered any guarantees that they’ll stop hiking rents and insurance premiums?”
“Err..not to my knowledge.”
“Addressed concerns regarding training?
“Not yet, but I’ve been assured they’re working on it.”
“Made efforts to make information more readily available to those thinking about taking on a pub?”
“I don’t think so.”
“So what exactly have they come up with? A national register of rents maybe?”
“Err….no.”
“Have they issued a list of prices pubcos charge for their tied products?”
“Err…no. They say the model is evolving and that these things take time.”
“Perfectly understandable. After all, this saga has only been going on since 2004. We wouldn’t want to rush things now, would we? Have they actually offered anything in the way of meaningful concessions?”
“Not that I’m aware of.”
“Jo, pubcos have long since realised that there are no credible constraints to the way they conduct business. After all, was it not government that gave them carte blanche to write the rule book? A bit ironic that government is now reluctant to address a problem of their own making, isn’t it?
Do you seriously think self-regulation will address this chronic imbalance in power?”
“Well the BBPA assure me it’s a step in the right direction.”
“With all due respect Jo, you’re new to the post. In-house shenanigans have been part and parcel of this industry from day one. There are things happening that you couldn’t possibly be privy to.
Do you honestly think that talking to the BBPA will give you a complete picture of what’s really going on?”
“I know they call me the Baby of the House, but even I’m not that naïve James.”
“Just remember, when you’re given a guided tour of the galley ship, things will appear calm and serene. Down in the hold it’s a different story. The tempo of the drum continues to gather momentum; signaling more is required from an already exhausted crew. How much more can they be expected to give?
We have to stop this insanity whilst there’s still time. Meet with the IPC Jo, that’s all I ask. They’ll be more than happy to give you a tour below deck. You might be surprised at what you find.
Now then; more Foie gras?”
“Oh James……”