Punch Taverns founder Hugh Osmond: 10,000 pub closures 'long overdue'

He also said that tenanted operators had “not covered themselves in glory” in recent years.

Osmond said the “perfect storm” of the smoking ban, the recession and other factors “found out the sector”.

He said: “It’s heresy to say it, but for a long time the UK has had too many pubs that aren’t economic. A lot of villages with a 2,000 to 3,000 population still had two or three pubs all offering the same thing, and plainly there isn’t an economic future for those pubs if you pay a commercial rent on them.

“I do think Punch and some of the others got ahead of themselves. The closure of 10,000 pubs has been long overdue. We thought it would happen the first time we invested in pubs in the mid-1990s.

“The UK, without a shadow of a doubt, five years ago, had too many pubs.”

He added: “I think in the long run, maybe even the medium run, what is happening to the pub industry is a good thing because pubs that come out the other side will be stronger.”

Osmond said he hasn’t owned a share in Punch since 2002/2003. He pointed out that Punch shares were worth £2.30 when the company floated and peaked at £14; they’re now worth around 13p.

“What happened in Punch and other pub companies like it, is that they took a good thing too far.”
Osmond pointed out that free-of-tie leaseholds were “more vulnerable in a downturn” because their fixed rents are higher. But he said: “In reality a lot of people, and probably average sites with average operators, had much higher rents and didn’t sell enough beer.”

Osmond said: “I don’t think the tenanted operators particularly covered themselves with glory in the last few years.”

He pointed out that when he was involved in Punch, only around 5% of the estate was let on non-permanent leases, a level that grew to between 20% and 30% before the financial crisis.