Ian Payne – Industry should resist minimum pricing: Veteran industry entrepreneur Ian Payne has argued that the sector should resist minimum pricing. Writing for Propel’s Friday Opinion section, he points to university tuition fees as an example of why the industry should be wary of minimum pricing: “Tuition fees were first introduced in September 1998 capped at a maximum of £1,000. In January 2004, the upper limit was raised to £3,000 and this was raised again in October 2010 to the princely sum of £9,000. If we assume that Westminster follows the Scottish Parliament (as it eventually does on most licensing issues) and adopts an initial 50p per unit minimum, it could be raised nine fold in just 12 years. It is not inconceivable that a minimum price of 50p in 2014 could be £4.50 in 2026. If that seems fanciful, ask yourself how many people in the year 2000 would have believed that a packet of cigarettes would cost £8.50 today.” Payne also notes that the health lobby is likely to press for further restrictions on alcohol once minimum pricing is introduced. He said: “We must remember that these people never give up. The 2007 smoking ban caused untold damage to our industry but did they stop there? Of course they didn't. Fanatics don't quit. In the five years since the ban, they have secured the abolition of cigarette vending machines, stopped the display of tobacco in most retailers and will soon achieve plain packaging. Don't think for one minute that these people will get off industry backs if they achieve minimum pricing for alcohol.” Meanwhile, Greene King called yesterday for the minimum unit price to be set at 50p in England and Wales in line with the Scottish plan – not 40p. JD Wetherspoon chairman Tim Martin told Morning Briefing: “Minimum pricing tries to deal with symptoms not the problem which is the VAT disparity between supermarkets and pubs. This enables supermarkets to subsidise drinks prices and has caused pubs to lose 50 per cent of beer sales in 30 years. This point is well understood by almost everyone in the trade but there are still a few slow learners.” (See Friday Opinion below for the full Ian Payne article)

Managed pubs Ebitda average passes £200,000: The company’s 954 managed pubs, hotels and restaurants grew their average Ebitda by 14.1 per cent to pass the £200,000 average-per-pub mark for the first time. This puts average Ebitda per pub ahead of JD Wetherspoon for the first time.

Licensee average tenure hits three years and ten months: The average length of stay for licensees in Greene King’s tenanted estate is three years and nine months. This still amounts to a licensee churn rate of over 25 per cent – one in four tenants leaving every year in an estate of 1,454 pubs (360 or so a year).

The importance of value: The company stressed the strong demand for “everyday treats” that offer value. Greene King sold 8.1m pints of Carlsberg, 25 per cent priced at £1.99 or under. Entry price dishes start at £3.99 at the 180-strong Hungry Horse chain, the small carvery option at Cloverleaf costs £4.45, Old English Inns has a two meals for £9.95 offer and a two courses for £9.95 deal at Loch Fyne drives “strong lunchtime and early evening trade”. 

The growth of digital: After significant investment, the company is seeing more than 100,000 website hits a week, a 44 per cent increase in the year and a 270 per cent increase via mobile devices. Facebook pages have been launched across managed pubs with an average of 300 fans per pub. The e-mail database has increased by 61 per cent after “highly targeted promotions” with one million e-mails sent out a month – the opening rate is 30 per cent. Loyalty card schemes are being trialed at 25 per cent of managed pubs.

The power of franchise: Greene King’s Meet and Eat franchise format – a food, drink, service and entertainment package introduced to 29 pubs – has boosted average weekly taking to £8,000 per week at each pub, a 150 per cent increase on previous average takings. Annual franchise earnings are on target at circa £40,000 per annum. Marston’s franchised pubs on its Retail Agreement average around £4,000 per week in takings because the company has targeted its bottom end pubs – Greene King has applied its franchise package to medium-quality pubs in the tenanted estate. 

Loungers reports 38 per cent turnover growth: Loungers, the Piper Private Equity-backed group behind the Lounge and Cosy Club concepts, has reported a 38 per cent growth in turnover for the 12 months to 30 April, after opening six new sites during the period. The company, which is led by managing director Alex Reilley, saw turnover for the year climb to £15.06m, while unit EBITDA was up from £2.46m to £3.14m. The group has 23 sites, having opened six sites during the period. Managing director Alex Reilley said: “We had another very good 12 months with all of the new sites performing very strongly straight from the word go in addition to a strong like-for-like performance from the rest of the group. The figures are particularly pleasing given that half of the new sites didn’t open until the final quarter of the financial year.” Piper’s investment in the business at the beginning of April, coupled with increased bank support from Santander for the group, will allow as many as ten extra sites to be opened by April 2013. Reilley said: “We’ve got a number of great sites lined up to open before the end of 2012 and we’re busy loading up the pipeline for 2013 and beyond.” The group opened its 24th site, Verdo Lounge in Wylde Green, Sutton Coldfield, in May and is currently on site in Salisbury developing its fourth Cosy Club, which will open in August. Work will soon start on a Lounge in Christchurch, Dorset following a successful planning appeal and the company is set to open its largest site to date, a 7,300 sq ft Cosy Club, in Cardiff, in late autumn. Reilley also confirmed that the group has three sites in the north-west - one in Liverpool and two in Manchester - already in legals. This is in addition to Lounge sites in Bristol, which would be its sixth in the city, and Portishead, North Somerset and a sixth Cosy Club site in Exeter, which is likely to open early next year.

McDonald’s Bigger Big Mac: Burger giant McDonald’s has launched a Bigger Big Mac in Germany, marketed as 45 per cent larger than the standard. Burger Business estimates the combined weight of its two beef patties at about 4.6 ounces.

Tokyo Industries boss launches Masters Degree in music industry management: Aaron Mellor, the boss of the 23-strong Tokyo Industries nightclub business, has teamed up with the University of Lancashire to launch a Master Degree in music industry management. Students will be able to spend time being mentored with Mellor as well as former New Order bass player Peter Hook.

Greene King defends itself over tax ruling: Suffolk-based Greene King has defended itself over a ruling by the Tax Tribunal that the company did not qualify for tax relief on a £20m payment put through a scheme set up by Ernst & Young nine years ago. Some have claimed the scheme amounted to aggressive tax avoidance. The company insisted it will challenge the decision. Greene King chief executive Rooney Anand said: “We understand, as many people do, the difference between tax evasion and tax efficiency. The opportunism being displayed by both HMRC and parts of the government in this area is a little unfortunate.”

Douglas Jack – Marston’s share price is “breaking out”: Numis Securities analyst Douglas Jack has issued a “buy” note on Marston’s shares with a Target Price of 130p. He said: “Marston's share price has finally broken out and should continue to appreciate, in our view, to reflect the company's progress in generating double-digit earnings growth and paying a progressive dividend (yielding six per cent) without increasing debt. New build expansion is the main source of growth and we estimate there is £11.6m upside to profit before tax forecasts by 2014 if the current level of high returns (18.5 per cent EBITDA on freehold sites) continues.”

KFC accused on mislabelling chicken as halal: A group of 40 of the UK’s leading Islamic scholars have called on KFC for mislabelling its chicken as halal. They claim the chicken labelled as halal is machine-slaughtered, which they claim is not permitted under Islamic law. A KFC spokesperson said: “We have worked closely with the HFA for our halal products and have complete confidence in its credentials.”

All Our Bars to re-open Punch’s Garrison Arms after £250,000 co-investment: All Our Bars, the company led by Paul Wigham, is to re-open The Garrison Arms in Shoebury, Essex, a Punch Taverns pub, next Wednesday (4 July) after a £250,000 co-investment with the company. Wigham said: “We are very excited at the prospect of developing a quality suburban local at a versatile site in a busy and vibrant area. Our aim in all of our sites is to provide a quality experience whilst retaining the local community feel.” It’s the second Punch Taverns pub Wigham has re-opened after a joint investment with the company this year – the first was The Essex Arms in Brentwood.

Premier Pubs and Inns buys Shoulder of Mutton, Little Horwood: Premier Pubs and Inns has acquired the freehold of The Shoulder Of Mutton in Little Horwood, near Bicester. Premier has been operating the pub on a temporary lease since last September, when the previous owners, Oxford Hotels and Inns, had put the Grade-II-listed pub up for sale for an asking price of £400,000.

Le Gavroche named Europe’s top restaurant: Review website TripAdvisor has named Le Gavroche in London’s Mayfair as Europe’s top restaurant. The two-Michelin-starred restaurant, run by Michel Roux Jnr, took top place in TripAdvisor’s first Travellers’ Choice Restaurant Awards in Europe and was also ranked fifth in the world. 

Gastro operator bids for endangered pub: Restaurant entrepreneur and gastropub Fasu Miah has tabled a bid to buy The empty Fox & Hounds pub in Denmead to turn it into a gastro pub. Owner Liberty Leasing had a bid to demolish the 120-year-old building and build two large homes on the site but were turned down by Winchester City Council. Miah runs successful Indian restaurants and gastro pubs in the Waterlooville area.

Vintage Inns to create Vintage Guide to Britain: Vintage Inns, the 200-strong brand operated by Mitchells & Butlers, is to launch the Vintage Guide to Britain to celebrate “little-known but much-loved beauty spots, local customs, dishes and must-see sites from throughout the nation”. Vintage Inns is inviting people to submit their hidden treasures, which will be collected on the group’s Facebook page and website. The top 10 submissions will go to a vote among the Facebook community and the winning entry will be awarded a grand prize of a meal for two every month for a year. The submissions will be used to create the Vintage Guide to Britain, which will take the form of an interactive map, offering users a valuable resource when planning days out. Clair O’Neill, head of brand marketing at Vintage Inns, said: “With the Olympics on the horizon and the Queen’s Diamond Jubilee just gone, it seems the entire nation is celebrating the best of Britain.”

Brunning & Price set to open biggest site yet: Brunning & Price, the 30-strong gastro-operator owned by The Restaurant Group, is to open its largest venue so far next week (3 July) - the resurrected Wharf in Castlefield, Manchester. The 370-cover pub will trade over two-and-a-half floors and a large outside area. The former Jacksons Wharf pub has been vacant since closing seven years ago. A former owner tried unsuccessfully to get planning consent to knock it down and re-develop the site for housing. Brunning & Price acquired the site from developer Peel in 2011 and has spent seven months restoring and fitting out the premises. Brunning & Price is currently working on another new site - St Martin's Lodge overlooking the racecourse in Chester - and has a site outside Telford under development.

Wetherspoon picks up Royston site: JD Wetherspoon has exchanged contracts on the former Manor House Social Club, in Royston, which has a population of 14,570. The Manor House Social Club put the property on the market for an estimated £1 million in May 2011 following a cash crisis at the club.

Leisure entrepreneur to open hotel on the Isle of Man: Veteran sector businessman and Isle of Man resident Trevor Hemmings is to open a 30-bedroom hotel, Ramsey Park Hotel, on the Isle of Man in August. It will replace The Grand Island Hotel – Ramsey is the Isle of Man’s second largest town. 

Apprentices - sultans or slaves by Nick Bish: We appear confused about the concept of apprenticeship and until we get it clear in our minds there will be no coherent or consistent action. Only the other day I heard talk of an ‘eight week apprenticeship’ and ‘apprenticeships at level seven’. All this abuses the English language and dilutes expectations because what is actually being considered is training and development. This concept, this activity is crucial and better understood and better practised in the hospitality sector than ever before and all praise is due to those companies that do it. But it’s not enough. Pubs, bars and restaurants as a sector within hospitality have long been the orphan whereas hotels and haute cuisine restaurants have been where the training effort and reputation have resided. We say we can deliver jobs and indeed we can but we still don’t really offer careers; we certainly don’t shout enough about the wonderful opportunities that branch out from the entry point of the first job in the pub. This is the route that takes individuals rapidly up to general and senior management in a retail company, or equips them to make the leap into ownership of their own business or even to acquire skills that can transfer to another sector. A highly educated and aspirant doctor was recently told there wasn’t a place for him on a medical course. At the time he was working part time behind the bar, so he asked the brewery if he could go full-time. They greeted him with open arms and showered him with courses, and now he is headed for deputy GM and who knows what promotion later. The point is that he didn’t know about this earlier – and it was so nearly a lost opportunity. And, as an aside, it wouldn’t be a bad idea if someone told his mother; I hate to think of the number of concerned but prejudiced mums who ask their talented kids temping behind the bar when they are going to get a proper job! It seems to me that it is training that is needed to get the job done properly – assembly line stuff, but an apprenticeship is more than that, it is about taking an individual and nurturing their talent, developing their skills over time so that they are fully equipped to make a career in this industry and drive our collective performance and reputation to a new and higher level. The government wants growth and can’t afford the unemployed. We can help solve both problems and indeed it was ALMR representations that helped double the central funding to subsidise apprenticeships. But this money is meant to help get people into employment rather than just pay for training costs of the existing workforce. This is the green light to getting good young people into our businesses, assessing them for suitability and then lighting a rocket under their future and watching their trajectory to success. I know of no one who is ashamed of our industry’s opportunities but very many despair about translating faith into action. This is not just for the mighty and fully resourced PLCs but for everyone, as individual businesses or local partnerships. There is a window of opportunity now to get and keep good people in the industry and I have no hesitation in pointing everyone to the BII at http://biiab.bii.org/apprenticeships and to the helpful National Apprenticeship Service at www.apprenticeships.org.uk.

Not much has changed on the ladies’ front by Ali Carter: I’m not normally one to come over all ‘sister act’ and I would never dream of burning my collection of Ultimo bras; but when someone as macho-centric as Jimmy Carr commented “Have you left all the women at home tonight lads?” as he did to a room filled with 95 per cent men and five per cent women from the pub industry, at a big award ceremony at The Grosvenor earlier this year, you can’t help but feel a sense of Groundhog day. I’ve been in the industry for over 20 years now, and am shocked that not a lot seems to have changed from the 1990s when I was laughingly given “three months” by the 15 strong field of male colleagues as the second ever female sales rep for the freetrade of a particular regional brewer. (Happy to set modesty aside and report that I went on to “whip their arses” by challenging the norms and selling cask ale in a way they had never considered!) Ann Elliott’s point last week in Friday Opinion about the lack of women running pub companies is really well made (although there are some enlightened chaps out there). Women at senior levels have all the male qualities AND the extra dimension of, as Ann says “strong leadership and emotional intelligence skills” - and it’s not as though these come at the expense of business acumen in other areas. I would be so bold to add to the list of these “womens’ intuition” qualities two additional strengths – women are natural teachers (not expecting learning to occur through osmosis like their male counterparts) and women are ‘open minded’ with a “there has to be a better way” attitude, diametrically opposed to the “we’ve always done it this way” mind-set of many men. For the last few years I have worked as ‘The Pub Mentor”. It seems as a ‘female’ coach, trainer and business support resource specifically to licensees, I am pretty unique. I was recently lucky enough to mentor this year’s BII Licensee of the Year Winner Mahdis Neghabian – a truly remarkable women with more tenacity in her little finger than most of her male counterparts. And yet her struggle to have her voice heard in this male-dominated industry has been extraordinary. She is one operator who truly understands that women are the decision-makers when it comes to ‘going out’ and her outlet The Camden Eye is testament to this. At grass roots level and perhaps not surprisingly I’m finding increasingly that most of my client base is female – not females struggling either; women who are doing really well but know they can fine-tune and tweak and do even better. (This in itself speaks volumes as the clients who seek my services because they are struggling are invariably men who have been resistant to change.) From the ‘sisterhood’ perspective this is encouraging and I doubt it is a coincidence but a reflection of the fact that women seem more receptive to this need to invest time in learning and self-improvement to find better ways to run their operations. Interestingly the response from female operators to my new Cloud Software for controlling catering costs (CaterCost) has been to welcome it with open arms – at last a chance for female operators to take control of another male dominated world of ‘chefs’ and ‘the catering kitchen’, and to be able to confidently challenge what goes on in this ‘mysterious place’ and demand better food controls, improved profits and to offer nutritional info about their food to their (female) customers. The men on the other hand - perhaps they’re simply scared of being challenged.

 

Minimum pricing by Ian Payne: It is very rare for a politician not to take the credit for a favourable trend or statistic. The fact is, there has been a deep-rooted fall in alcohol consumption in this country since 2004. Why then, has no political leader attributed this fall to the brilliance of their policies? There can be no greater opportunist than Ed Balls but even he fails to take credit for the decline. The unfortunate answer is that the medical terrorists are gaining the high ground in the moral debate and that logic and facts are therefore ignored in the scramble to be seen to be part of the zeitgeist. The introduction of minimum pricing for alcohol is the logical next step for many members of the anti-tobacco lobby. You can imagine the misanthropes surveying the battleground of their smoking ban victory and asking: “Where next”? Without stretching the war analogy too far, there is no doubt that we need a Churchillian figure to turn the tide. One of his great quotes is, “I have taken more out of alcohol than alcohol has taken out of me”, and this is surely the case for the vast majority of drinkers. The argument against minimum pricing can be summed up in one sentence. Why would any sensible retailer voluntarily give the government control over its retail prices? History has surely taught us that legislative tinkering is never in our best interests. There are three powerful reasons why the whole industry should oppose minimum pricing. Firstly, and most importantly, whatever price is set initially will not stay that way for long. University tuition fees offer an insight into why the government cannot be trusted with prices. Tuition fees were first introduced in September 1998 capped at a maximum of £1,000. In January 2004, the upper limit was raised to £3,000 and this was raised again in October 2010 to the princely sum of £9,000. If we assume that Westminster follows the Scottish Parliament (as it eventually does on most licensing issues) and adopts an initial 50p per unit minimum, it could be raised nine fold in just 12 years. It is not inconceivable that a minimum price of 50p in 2014 could be £4.50 in 2026. If that seems fanciful, ask yourself how many people in the year 2000 would have believed that a packet of cigarettes would cost £8.50 today. The second concern is that the medical terrorists are given another victory without having to put up a real fight. We must remember that these people never give up. The 2007 smoking ban caused untold damage to our industry but did they stop there? Of course they didn't. Fanatics don't quit. In the five years since the ban, they have secured the abolition of cigarette vending machines, stopped the display of tobacco in most retailers and will soon achieve plain packaging. Don't think for one minute that these people will get off industry backs if they achieve minimum pricing for alcohol. My third concern relates to the efficacy of our lobbying. If you compare our industry to the best in class, we fall way short. The Freight Transport Association, the major oil companies, the betting industry, the banking industry and the Scotch Whisky Association to name a few have all proved what can be achieved through effective lobbying. However, the real kings of the pile are the major supermarket chains. They are almost entirely responsible for the rise in the misuse and abuse of alcohol over the past thirty years. The government has palpably failed to control these Godfathers of binge-drinking. I shudder to think how we will fare against them when it comes to discussing the finer points of any minimum pricing legislation. Who do you think will emerge the stronger, the on-trade or the supermarkets? In my opinion, the arguments against minimum pricing of alcohol are overwhelming. The only way to prevent the government from wreaking further havoc in our industry is to mount a powerful and effective campaign against this initiative. If we miss the opportunity, we will surely regret it for years to come.