Story of the day:
Health Select Committee MPs suggest 50p minimum price: MPs on the Health Select Committee have suggested there are “practical arguments” for setting the minimum unit price for alcohol at 50p given that’s the level proposed in Scotland. But the committee called for a sunset clause so that the plan expires if it fails to reduce harmful drinking. “We were struck by how little evidence was presented to us about what the implications of different levels of minimum pricing would be and we think it’s an important decision and does need to be supported by the evidence,” Committee chairman Stephen Dorrell said. The committee also called for tough curbs on alcohol advertising and a possible ban on drinks companies sponsoring sporting and cultural events as way of bringing down the 6,500 deaths a year caused by drinking. There is also a call for drinks firms to do more to tackle the damage their products cause or risk being seen as “paying only lip service” to the need to reduce the “insidious and pervasive” health effects linked to drinking too much, which cost the NHS more than £3bn a year. Association of Licensed Multiple Retailers strategic affairs director Kate Nicholls said: “The Select Committee is right to highlight the fact that the majority of the population drink alcohol sensibly and they are also right to emphasise that individuals who drink have as much of an obligation for their actions as those selling it. We are pleased that politicians of all parties have now finally woken up to the fact that it is the plethora of pocket money priced alcohol promotions which are the real problem. With 70 per cent of alcohol now bought and consumed at home, and widespread loss leading, punitive measures against pubs and bars are not delivering either government’s public policy objectives on health and crime and disorder. We are disappointed, therefore, that the Committee has not taken the opportunity to press for a wider balanced package of measures to tackle unregulated supermarket sales. What we need is not only measures to make it more expensive to drink at home, but also action to remove the horrendous regulatory and tax burdens which are crippling the pub and literally pricing many out of the market. Encouraging people to drink in pubs means that they consume measured quantities served by supervised trained staff and promotes responsible consumption. We are pleased that the Committee has recommended a sunset clause, but do not agree with their suggestion that the setting of a price should be regularly reviewed – this must be a floor below which prices cannot fall, not something which is subject to automatic indexation, if it is to tackle the irresponsible minority, not the responsible majority.” Meanwhile, Scotch whisky producers are planning to protest to the European Commission over minimum pricing plans.
Industry news:
Winemaker earns beer recognition: An English beer, made by an English winemaker, has been declared one of the world’s best lagers. The International Beer Challenge – which has been judging the world’s best beers for the past 16 years – awarded Kent’s Chapel Down vineyard a gold medal for its Curious Brew premium lager. The beer maker’s ‘Oscars’ are entered into by the world’s largest breweries all the way through to tiny, pioneering microbrewers. This year, judges tasted over 400 beers before declaring the Kent winemaker’s lager to be the best of its class. The Challenge deemed only 30 beers, from countries including Belgium, Germany, Italy, New Zealand and the USA, to be of gold medal standard. Curious Brew was one of only three international lagers awarded a gold gong. American brewery Samuel Adams picked up the other two lager golds.
Luke Johnson – it’s a tough time to do deals: Risk Capital Partners founder Luke Johnson, who is rumoured to be in the final three to buy Pizza Hut, has claimed, in his weekly Financial Times opinion article, that it is the toughest time he can remember to do an acquisitions deal at the right price. He said: “Buying companies tends to pay off when you can add value to the business. That means delivering extra revenue, saving costs or introducing new technology or people. This is much easier to do if you are a trade buyer rather than a financial acquirer. However, financial buyers are experts at doing deals, so carry out the process of buying and selling well – and are less at the mercy of stock market fluctuations when it comes to timing. And right now is the toughest time I can ever remember to carry out solid acquisitions at a fair price.”
McDonald’s turns down Olympics tax break: McDonald’s has bowed to an online campaign and turned down an Olympic tax break. The move follows a story by Ethical Consumer magazine and pressure from the online campaign group 38 Degrees whose online petition has gathered more than 150,000 signatures. New tax rules ushered in as part of London's winning bid to host the Games mean commercial partners could pay no tax at all on their earnings from the Games. McDonald's said that the cost of turning down the break would be minimal, as revenue from the Games would be less than 0.1 per cent of its annual sales in the UK. It said in a statement: “We will not be making any corporate income tax exemption claim with respect to any activity concerning our involvement with the London Olympic and Paralympic Games.”
Norwich pub licensee tries direct lobbying: Norwich pub landlady Dawn Hopkins has taken a direct approach on lobbying over industry issues. Hopkins, attended Tuesday's first Labour Party annual business reception in central London, which was also attended by Labour leader Ed Miliband and shadow chancellor Ed Balls. The move is supported by her local newspaper, Norwich Evening News, which is running a “Love your Local” campaign.
Motley Fool highlights tax burden on sector: The Motley Fool investment website has highlighted the tax burden carried by the sector. An investment column stated: “Stronger pub chains should be able to carry on growing at the expense of their struggling competitors. Britain's pubs have been under severe pressure during the last five years thanks to the smoking ban, the recession and government policies that discriminate against pubs and favour supermarkets.”
Energy drinks do not boost energy: Academics from Oxford and Harvard have claimed energy drinks are a waste of money and could actually be harmful. They claim leading brands contain large amounts of sugar and calories, which encourage weight gain.
Company news:
Mitchells & Butlers like-for-like sales edge up; chief executive appointment “continuing”: Managed operator Mitchells and Butlers has reported like-for-like sales growth edged up was 0.4 per cent in the 14 weeks to 14 July and is 1.9 per cent for the 42 weeks of the year to date, with “the recent period, in particular, adversely impacted by the persistent wet weather and the negative impact of the European Football Championships”. Within this, trading on key days and special occasions has remained strong with four per cent like-for-like sales growth over the five days of the Diamond Jubilee weekend. Like-for-like growth in the most recent nine weeks since the date of the interim results announcement has been 1.6 per cent. Total sales for the retained estate were up 5.1 per cent in the first 42 weeks. Recruitment of a new chief executive and non-executive directors is “continuing”. Roll-out of free wi-fi across the estate is now more than 50 per cent complete. Bob Ivell, executive chairman, said: “Despite the continuing poor weather and challenging economic conditions, we are continuing to deliver a resilient operating performance. Our business transformation programme is progressing well and we are increasing the focus on guest service in all parts of the business. We remain on track to deliver full year results in line with market expectations.”
Novus sales could come within a week: Sky business editor Mark Kleinman has claimed that Tiger Tiger operator Novus Leisure could be sold to two private equity firms, LGV Capital and Hutton Collins, within the next week. Kleinman said: “A deal could be struck within the next week, people close to the talks say. Novus, which also owns The Balls Brothers and Jewel chains of bars, has performed strongly despite the broad downturn in consumer spending. LGV, which is part of the insurance group Legal & General, owns two other pub groups: Amber Taverns, which buys pubs which have been closed down and are in deprived areas, and Liberation Group, which owns nearly 70 pubs in the Channel Islands. Hutton Collins has backed a number of leisure industry buyouts, including Caffe Nero, the coffee bar chain, and Wagamama, the restaurant group.”
Enterprise Inns reports 26 pubs affected by flood damage: Tenanted operator Enterprise Inns has reported that it has 26 pubs in the estate affected by flood damage. The pubs affected are mostly in Yorkshire and the north-east, with two pubs in Hebden Bridge affected – The Shoulder of Mutton and The Stubbing Wharf – and two pubs in Gateshead – The Swan Hotel and The Aletsater. The Coventry Arms in Corfe Mullin, Dorset, was forced to close due to flood water from the River Stour – it only opened two months ago after a refurbishment. The pub has a history of flooding and was affected in 2000 and back in 1979, and could be closed for two weeks while its wooden floor, which floating off its joists is ripped up, dried out and replaced.
Eastenders actor takes over Punch Taverns pub: Eastenders actor Simon White, who played the part of Alfie Moon’s friend, has taken over Punch’s Chequer Inn in Ash, Kent. He said: “I'm here for good. I want to keep it very much a local, family pub. There's no point trying to make it something it's not.” As well as acting in Eastenders, White played Christian Bale's stunt double in Batman Begins and also made a film for the BBC starring Lindsay Honey – better known as British porn star Ben Dover.
Carluccio’s boss eyes 120 sites: Carluccio’s chief executive Simon Kosoff believes the company will have grown to 100 sites in the UK by 2015, with an eventual saturation point target of 120. Kosoff told an Arena hospitality networking event that site openings had doubled to ten per annum since the company had been acquired by Landmark in 2010. He also reported plans to double the number of sites operating overseas under franchise to 12.
Stonegate nightclub pioneers mobile phone security scheme: Rosies nightclub in Chester, which is owned by Stonegate Pub Company, has partnered Cheshire police to launch a new phone safety campaign aimed at reducing the number of lost or stolen mobile phones reported to police in the city. The “Bunjee Project” involves young people attaching a ‘Bunjee’ type, easy-to-use cord to their mobile phone, which is then clipped onto the pocket or handbag. Dave Cooper, general manager of Rosies nightclub, said: “As a responsible operator and one of Cheshire’s busiest venues, ensuring that our customer’s property and valued possessions are safe is a priority.”
Simon French – weather having a dramatic effect on trading: Simon French, leisure analyst at Panmure Gordon, has claimed that “the worst summer in living memory is having a dramatic impact on trading patterns (as evidenced by the -1.1 per cent like-for-like sales growth reported by Fuller’s)”. He added: “Trade in July and August is likely to be highly volatile given the impact of the Olympics. We note that fuel prices are starting to rise again, despite the postponement of the fuel duty increase until January 2013. All these moving parts are making it increasingly difficult to identify underlying trading patterns. Overall we remain neutral on pubs & restaurants but reiterate our key “Buy” recommendations on Spirit Pub Company, Wetherspoon, Marston’s, Restaurant Group, Young’s and Enterprise Inns.” Douglas Jack, leisure analyst at Numis Securities, said: “Large swings in trading patterns should continue in the short-term. July’s poor weather should favour restaurants over pubs. In August, the Olympics should boost London, but could become a home television event elsewhere, which is not good for provincial pubs or restaurants. At this stage, despite this year's dire weather, we believe all the quoted managed pub and restaurant operators are trading in line or slightly ahead of forecast assumptions. From September, it is probable that normal long-run trends will resume (over the last year, the Peach Tracker averaged 1.5 per cent, with total sales at 5.6 per cent, favouring pub restaurants). This scenario favours the managed pub operators and regional brewers, with lower cost pressure and easier weather-related comparatives to look forward to in 2013.”
Wagamama founder to launch new Thai concept: Wagamama founder Alan Yau is to launch a more accessible, café-style version of his Busaba Eathai brand. His new concept Naamyaa is based on the cafés of Bangkok and will serve Thai and Western dishes. The first site will be located within London’s Angel development between City Road and Upper Street. The new Thai concept is thought to have more roll-out potential than Busaba Eathai.
Mitchells & Butlers head of wine buying joins Enotria: Mitchells & Butlers head of wine buying Joan Torrents is to join Enotria as director of buying next Monday (23 July) and will head-up the five-strong Enotria buying team. Torrents oversaw a wine category with a sales turnover of £200 million across the M&B estate. Enotria commercial director Mark Kermode said: “Joan has fantastic wine roots and heritage through his family wine business in Spain, and a wealth of experience in UK buying positions.” Torrents said: “In the past few years I have dealt with numerous wine companies and Enotria has always been in my list of outstanding suppliers.”
Wetherspoon to sell five pubs: Property agent Christie + Co is selling five pubs on behalf of JD Wetherspoon. Three of the five are freeholds, available with vacant possession upon completion. They are: The Eastgate in Northampton which has open plan bars on two floors and is on the market at an asking price of £975,000; The White Swan in Portsmouth, a large open plan bar in the city centre, available at a £700,000 asking price; and The Picturedrome in Liverpool, a former cinema and television centre, which has a guide price of £495,000. The two leasehold pubs — The Printworks in London’s Farringdon Road and The Lodestar in Neston, Merseyside — are both currently closed and are available for nil premium on a free-of-tie lease.
Whyte and Mackay fined £20,000: Whisky distiller Whyte and Mackay has been fined £9,000 for leaking 20,000 litres of oil from one of its plants into a nature habitat. The firm pleaded guilty to polluting the Cromarty Firth wildlife habitat for birds last August.
Punch pub introduces kids eat free menu: A Punch Taverns pub in Sutton Coldfield, run by Warren Roberts, has introduced a ‘kids eat free’ menu over the summer after a £200,000 refurbishment. The Boot Inn, situated on Rectory Road, will offer the menu Monday to Friday from 12pm until 5pm in the summer holidays. The menu features popular children’s dishes such as pasta, burgers and hot dogs. “The summer holidays are often an expensive time for families, when trips away and eating out can leave parents feeling the pinch,” said Roberts.
Table tennis concept to open in London: A new table tennis concept Ping is to open in London’s Earls Court next month. The 7,000 square foot venue will serve pizza and offer three table tennis tables. It is the brainchild of Alex Potter, Stevie Thomas, Jonny Boud and Fraser Shipsides, who oversee the supper club Love Brunch and nightclub Bungalow 8.
Britvic – third quarter challenging: Britvic’s revenue in the UK dropped by 6.9 per cent in the third quarter. Chief executive Paul Moody said: “The third-quarter has been extremely challenging for Britvic. The weak consumer environment and very disappointing weather at a key time for soft drink sales have had a marked impact on our performance. The decision to recall Fruit Shoot resulted in a further negative impact towards the end of the quarter. As announced last week, these events caused us to re-set our expectations for the full year and our guidance remains unchanged. In the foreseeable future, our resources will be fully focused on re-establishing Fruit Shoot in the market as soon as possible.”