The FSB's utopian vision may yet become a reality

16-Oct-2013 - Last updated on 17-Oct-2013 at 07:50 GMT

Willock: "The survey offers a utopian vision of a free-of-tie, market-rent-only UK pub estate, which may yet be forced upon pubcos by the Government"

In a shock new poll this week it was revealed that turkeys are against Christmas. A survey of 500 of the gallinaceous fowl showed that the vast majority would prefer the festival to be cancelled. Meanwhile, another piece of research has just ‘discovered’ that tied pub landlords think they pay too much rent.

Please forgive the rather facetious intro to this week’s editor’s comment, but I’m not sure that the Federation of Small Businesses (FSB) is telling us anything we didn’t already know. In asking the question: “In terms of your pub’s profit, do you think the pub-owning company takes: too much; too little; unsure?” it invites the only answer that anyone paying dues to another organisation will make.

How do I feel about the amounts of money I pay in council tax, utility bills, water rates etc? I think they’re all too high as a proportion of my income and I’d like them all to be reduced.

Pecking order

While the headline results of the FSB’s questionnaire don’t shed much new light on an already well-lit situation, actually the relative scores of each of the pubcos are quite interesting. They show Enterprise and Punch leading the pack on ‘overcharging of rent’, closely followed by Star Pubs & Bars. Then there is a small gap to Admiral, another to Greene King, and another still to Marston’s.

So now (to continue my turkey theme) at least we know the pecking order of dissatisfaction with pubco rents.

But what else can we divine from the FSB’s investigation?

It says that 88% of respondents would take a free-of-tie option with an independently assessed fair rent if offered it by their pubco. And a similar proportion believe they would be better off financially “if their pub was free of tie and they were paying a fair rent”. This obviously depends on their interpretation of “fair rent”.

If they are suggesting that they would be better off if they were free-of-tie and had cheaper rent, then that is self-evident, but not meaningful.

Complacency

More insightful than that are their assertions that, if they were free-of-tie, they would: be more confident about their future (98%); do more maintenance/repairs on their pub (78%); take on more staff or increase staff hours (75%); spend more on advertising and promotion (74%); offer a wider range of beer (68%); and charge less for beer (65%).

It’s a utopian vision of a free-of-tie, market-rent-only UK pub estate, which may yet be forced upon pubcos by the Government.

And the pubcos would only have themselves, their excesses and their complacency to blame, as they now wage their own desperate campaign against change.

But — don’t forget — those licensees who, according to the survey, so badly want freedom and choice, are the same people who willingly signed tied tenancy agreements — offering low-cost entry to the pub market in exchange for limited freedom and choice.

The same group of people, the FSB survey says, among whom 28% apparently believed — when they signed their lease — that the price they would be paying the pubco for beer would be the same, or lower, than they could get on the open market.

Pull the other one — it’s got feathers on it!