Russell Stone of the George on the Green in Holyport near Maidenhead, Berkshire, took his case against Enterprise Inns to the new Pubs Independent Conciliation and Arbitration Service, known as PICA-Service, on 17 October.
He was the second licensee to go through the process and Enterprise Inns was found in breach of its Code of Practice for not adhering to timeframes in connection with a scheduled rent review. An award of damages was made and Stone has been invited to submit an application for costs.
Stone said: “They (Enterprise Inns) just picked on the wrong person.
“What is annoying is that you have to give the pubco a bloody nose before they wake up.”
Stone, a former director of a restaurant company, took on the 24-year lease of the George on the Green in 2006 on an assignment to run the pub with his family.
“I decided to get out of the rat race,” he explained. “I knew nothing about pub companies or about Enterprise Inns as I had worked in restaurants all my life.”
Stone was paying Enterprise Inns a rent of £30,000 per annum and said that his problems with the company started when his rent review was due in September 2010. He received a letter from Enterprise informing him that his rent would be increased to £80,000 a year.
“This letter would have cost me £250,000 over five years, wiping away any value of my lease.
“Enterprise said it was just a starting point, but this isn’t the way you run a retail partnership. It goes against all things — not just the Code of Practice but all the things that chief executive Ted Tuppen stood up and said about what the company does with its area managers.”
It was at this point that Stone started documenting everything and talking to others in the sector.
“I was talking to people who had quite extreme views about pub companies, but I didn’t want to be anti-pubco,” he added.
PIRRS
Stone was still concerned about the proposed hike in rent and took his rent review letter to former BII chief Neil Robertson, who persuaded him to consider the Pubs Independent Rent Review Service (PIRRS).
“PIRRS is a cheap way of going through arbitration as costs are capped at £1,500. I was happy with the way this worked,” said Stone.
“A lot of people would have had to get a Royal Institute of Chartered Surveyors-qualified surveyor to take their case, which could have cost between £4,000 and £6,000, but I represented myself.”
Stone said he found the PIRRS service fair and was pleased with the outcome that ruled his rent should be £38,750, rather than the £52,500 that Enterprise surveyors presented in the case.
“I spent a year trying to persuade this company that my rent should not be more than £42,000 per annum, when I should have been running my business. To put me and my family through something like this is nonsensical.
“This is where I started to think they [Enterprise Inns] had got away with this and I am not happy.”
PICA-Service
The self-regulation deal with the Government over the pubco-tenant relationship had agreed the formation of the conciliation service and Stone decided to use it.
“I put a complaint together and sent it to PICA-Service. You have to submit a request for compensation and you have to list what you think the compensation should be.
“I listed stress, loss of business, the fact that I had put my pub on the market, which cost £1,000, and the energy of having to do all the PIRRS information,” he said.
The result was a presentation to the board of PICA-Service earlier this month at the British Beer & Pub Association offices in London, with presentations made by both Stone and Enterprise Inns.
“The panel was very good and their questions were fair. My experience is that you have to be objective and people who are close to this industry are not objective.
“I went in there with an open mind. You have to have faith sometimes and I was starting to lose faith,” Stone said.
However, Stone said he is totally happy about how the case was handled and the result, which found Enterprise Inns in breach of its code.
And what of the future?
“I can’t tell you how disappointed I am with Enterprise Inns. They have not treated me with any respect.
“But I am chuffed because I can now move on and this is closure for me,” Stone concluded.