(Difficult times for the UK pub industry)

Pub keepers in the UK have launched a campaign asking pub companies who own the properties to cancel their rent while the country is in lockdown due to the coronavirus.

First a primer on the pub industry in the UK…

The majority of pubs in the United Kingdom are owned by large companies that oversee sometimes thousands of properties.

Some are extensions of established breweries such as Fuller’s and basically outlets for the brand. And other pub companies are property landlords who strike contacts with brewers and lease their pub operations to small businessmen, known in the UK as publicans, who in turn pay a monthly rent which can vary depending on the volume of sales each month.

Its a unique business arrangement…Pubs’ rents are calculated by their beer sales as opposed to square footage, which means they are charged more than other businesses.

Pub groups such as Greene King and Marston’s collect the majority of their profits from their beer contacts. Local pub franchisees purchase beer from these companies, often at a large mark-up, in exchange for reduced rents.

And now with the UK’s pub business shut down due to the coronavirus, many publicans find themselves in a difficult situation…with the pubs they run unable to generate income, yet still beholden to large pub management companies more reliant on rent than ever.

UK pub groups such as Greene King, Star Pubs & Bars and Marston’s and Enterprise Inns have already told tenants they plan to defer all rent payments until lockdown measures are lifted.

But as the lockdown continues some local pub operators fear that a simple rent deferral will create a burdensome obligation that threatens their ability to stay in business.

Some pub companies including Admiral Taverns, Adnams, Donnington, Fuller’s, Robinsons and Young’s have completely cancelled rent for their tenants.

But many have not…..

To help broadcast their dire situation, a group of UK pub operators have launched a campaign called #NoPubNoRent on social media calling on pub companies to cancel rent payment for the months they’ve been shut down.

But as a spokesperson for Greene King told the Drinks Business cancelling its tenants’ rent “simply isn’t viable”….

“All pubs and pub companies are under immense pressure currently and we acted swiftly to alleviate any immediate cash flow concerns for our leased and tenanted partners by deferring rent…We have staff here too.”