21 January 2009
Fair Pint: pubs are safe if under a lease
As the economic climate worsens and with pubco share prices falling, many licensees fear what would happen if their pubco was to enter administration.
Although the big two pubcos, Punch and Enterprise, have consistently stressed they are not close to breaching banking covenants, the current climate with high street names such as Woolworths and MFI disappearing has made lessees understandably nervous.
"Lessees are naturally concerned about what would happen if the company they are leasing their pub from goes under," said Fair Pint founding member and chartered surveyor David Morgan.
"Under these circumstances the freeholds of the properties would transfer to the banks which the pubco have borrowed money from and would probably be sold on. The terms of the lease and the rights of the lessees over their property would be unchanged. Lessees would not lose their pubs."
He added: "The one aspect of current arrangements which could be changed by new freeholders is supply arrangements and prices. This of course opens up the possibility of pricing arrangements which take a longer term view of the profitability of pubs.
"However, the nature of wholesale market means it is likely that the suppliers that any new freeholders use will be the ones currently used by the pubcos, so lessees would be unlikely to see any change in the breweries their beer and cider comes from.”
Fair Pint is campaigning for an end to the beer tie.
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