‘I’ve had enough’ - pub company under fire after four Norwich landlords stand down over lease talks
- Credit: Copyright: Archant 2017
A pub company has been accused of pushing landlords out of the industry after four Norwich pubs announced closure over failed lease talks in one week.
The four pubs – the York Tavern, Brickmakers, Garden House and Gibraltar Gardens – have announced they will not renew their leases, with three putting it down to steep rent increases, and the fourth saying they were denied a lease renewal.
All are part of the Ei Publican Partnerships, which runs more than 5,000 sites nationally and dozens in Norfolk, and last year made a post-tax profit of £54m.
A fifth Ei pub, The Woodman on North Walsham Road, will also close but said it had reached a mutual agreement with Ei which did not centre on rent. The company has said all will remain as pubs, and that they hope to find new tenants quickly.
The five pubs are tied – a set-up where they are owned by breweries or pub companies, such as Greene King or Punch Taverns, with the publican obliged to buy beer from only the owner, often in exchange for a lower rent.
They are divisive – supporters say it more easily enables people to enter the industry, while those opposed say tenants pay well over the odds for beer and face steep rent increases.
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Dean Bath has been in the pub trade for a decade, and had run Gibraltar Gardens, on Heigham Street, for three years. But he said when the firm moved to double his rent – from roughly £2,200 to near £5,000 a month – it felt like time to step back from the trade.
'We could just never do that,' he said. 'Even as it was, it was a push. Pubs are a dying industry and it was really tough trying to suck people in. Trade had been starting to pick up. The first year was tough, the pub was on its knees when we came in, but we've had so many phone calls for weddings and corporate events for Christmas.'
He said the price of buying beers through Ei - often known as the 'wet rent' – was steep, but it was the rent increase – dubbed the 'dry rent' – that finished the business off.
'I've had enough,' he said. 'I just want to leave the trade now, and find a home. We did really like it – it is hard work but the social aspect was really key. It's just about money now though.'
At the York Tavern, the team said a proposed new lease would have more than doubled their rent, while the Brickmakers said an increase made the business untenable.
But it isn't the same everywhere. Jonathon Childs runs the Boundary Pub, on Aylsham Road, as part of Ei's Craft Union Company – where self-employed managers run the business, and take away 18pc for their, and their employees', wages.
Mr Childs said: 'My own personal experience under the Craft Union model is brilliant – Ei in my eyes have made a great model of business. The new model offers me a refurbished community-led pub with great support a huge range of products to offer at great prices.'
The Garden House, on Pembroke Road, is another due to become a Craft Union pub, as part of a national move for Ei, which will see them cut out the publican and manage more pubs themselves. The Garden House team said they were not offered a lease renewal.
Another pub landlord in Norfolk said they'd had a positive experience with Ei. They said: 'It's not perfect but it's certainly not what people say. People know what they have signed up for – the biggest challenge is getting people through the doors.'
But Ian Stamp, chairman of the Norwich and Norfolk CAMRA, said, pictured above, the industry was becoming money-centric.
'They don't care about pubs in the slightest. They are not interested in them as a social amenity,' he said. 'It's about making as much money as possible. It's a massive blow to the community when you lose pubs like the Brickmakers.'
We asked Ei whether they felt their demands made business untenable and whether they felt they were having a negative impact on the pub industry.
A spokesperson said: 'We are in dialogue with our publicans in order to map out the way forward for each specific venue. We're aware of the special place these pubs have at the heart of the local community and would like to reassure customers that we are committed to running fantastic and welcoming pubs in Norwich.'
Clive Lewis, Norwich South MP, said: 'Pubcos have been getting themselves an increasingly bad reputation for using sharp practice to boost their profits.
As it stands, it is far too difficult for landlords, landladies and local communities to stand up to injustices.'
He said Labour would change the situation by introducing new powers to protect community hubs from pubs to post offices, and, because it 'is clear the fate of these pubs in our city is part of a much bigger injustice', would set up a national review of local pubs and
a joint task force to consider wider issues.
Chloe Smith, Norwich North MP, said: 'It's a huge shame to see this spate of closures and I certainly know that pubs like the Woodman and the Brickmakers are at the heart of the community. I've held advice surgeries and meetings there myself.'
She said she hoped the pubs had made use of rights and protections available, including the Pub Code, independent adjudicator and rent options.
'We did this because it's important to make things fair for the tenant against a big company,' she said.
Government inquiries into pub owning businesses (POBs) – and regulation around them – have been held several times in the last few years.
In 2012, the government announced new legislation which would be overseen by a Pubs Code Adjudicator – though did not introduce a much called-for provision for tenants to ask to go 'free of tie' during their lease.
But under the Fair Deal for Your Local campaign, it was added in 2014.
Going 'free of tie', or market rent only (MRO), releases a tenant from the requirement of having to buy beer through the brewery. It came into force in May 2016.
But many say pubs have, in reality, struggled to secure MRO deals, with many spending hefty sums on legal fees to do so.
They say POBs find ways to work around it – such as significantly increasing rent. Management operations – such as Craft Union – are also exempt from the laws.