Pubco founders 'disregard plight of tenants' says Tim Martin

Writing in the March edition of Wetherspoon News​, the company’s customer magazine, the outspoken chairman pointed a finger of blame at private equity investor Guy Hands and the founders of Punch Taverns, Hugh Osmond, and Enterprise Inns, Ted Tuppen.

Martin said: “In essence, Hands and Osmond bought the large tenanted pub estates of the major brewers, using borrowed money, and then hiked up the rents and the beer prices paid by the tenants. As a result of the increased income which they generated, they were able, in effect, to remortgage the pubs, extracting tens of millions of pounds of ‘profit’ for themselves.

He added: “The problem, in my opinion, is that the so-called ‘business model’ which they helped to pioneer was unsustainable – and thousands of  tenants have gone to the wall – and thousands of pubs have closed.

Bankrupt​

“After Hands, Osmond and their acolytes and imitators sold out, the majority of the pubs in the tenanted estates ended up with public companies called Enterprise Inns and Punch Taverns. They continued to buy pubs and increase debt (as well as continuing to increase rents and beer prices for tenants) right up until the credit crunch hit. When the individual licensees/tenants started to suffer between the hammer of high rents and beer prices and the anvil of the tax-subsidised supermarkets, unprecedented numbers of publicans went bankrupt.”

Tax disparity​

Martin, who is personally involved in the VAT Club campaign to reduce VAT in the hospitality sector, continued: “A depressing aspect of this sad chain of events has been the attitude of the former pub Titans to the plight of the tenants. Guy Hands and Hugh Osmond, joined recently by Enterprise Inns’ [recently retired] boss Ted Tuppen, have said nothing at all about the tax disparity with supermarkets which weighs even more heavily on pubs than their own financial engineering.

“Yet they have been exceptionally vociferous in criticising high tax rates which apply to them personally. Guy Hands, in high dudgeon, removed himself some time ago to the tax haven of Jersey. Hugh Osmond and Ted Tuppen remain residents, but have been shouting from the rooftops at the injustice of the Labour Party’s proposal to increase the top rate from 45% to 50%.

Egocentric​

“There is a justifiable argument for a reasonable top rate of tax which encourages hard work – Britain did not benefit from the Rolling Stones hiding from the taxman in the south of France in the 1970s. However, the disregard of the financial engineers for the plight of their tenants and their egocentric concentration on their own positions, dressed up as national concern, might even have caused Maggie Thatcher to side with Ed Balls.”