When Mike Tye was hired by the then chief executive of Punch Taverns, Giles Thorley, to run its Spirit managed division in 2008, a former colleague of Tye’s at Whitbread called me to hail the move, describing the new Spirit boss, who previously had spells running Costa Coffee, Premier Inn and David Lloyd Leisure at Whitbread, as an “agent of change”. 

His arrival at Punch came a full three years after that company had acquired Spirit from its private equity owners. I remember Tye’s first full presentation of his new plan for Spirit, soon after he had a chance to survey the estate. A senior colleague of the time told me that Tye had already done something glaringly missing in previous years – he had a robust and confident strategy for the estate and had instilled belief in his colleagues. Tye’s plan involved creating a branded strategy, with each and every pub moved to a position in a market quadrant. It was pretty bold stuff after years of stagnation at Spirit: its previous private equity owners, for example, cheerfully admitted that there had been no real legacy of their ownership. Rather, Spirit had been a classic private equity project, with price levers used to drive volumes, capex light on the ground and edgy sales and leasebacks to extract cash. Under Punch ownership, the estate had idled along. Tye’s arrival at Spirit was essentially year zero – and there was no escaping the crying need for radical estate evolution. 

 

Half a decade or so on, Tye’s original vision for realising Spirit’s potential has pretty much come to pass. In fact, you can make an argument for Spirit having made the most progress along the evolutionary curve, among its peer group, in this time period. Its prize brand in 2008 was Chef & Brewer, which dated back to the 1950s and a catering company called Levy & Franks. At one stage it was the cutting edge of country destination pub retail, but had failed to evolve to match Mitchells & Butlers’ offers in the same segment, Vintage Inns and Premium Country Dining Group. In the early years of Punch ownership, the company seemed frozen by indecision on how it could update Chef & Brewer without alienating parts of its customer base. Tye and his team found the answers, applying capex across the estate to modernise Chef & Brewer environments and moving the offer into the updated mainstream.

 

Perhaps more remarkable has been the creation from scratch of two value-food brands, Flaming Grill and Fayre & Square, now with more than 100 sites each. Some will argue that Flaming Grill owes a fair amount to Mitchells & Butlers’ Sizzling Pub brand. But that underestimates the size of the challenge in creating a new brand, which will inevitably carry its originator’s DNA, for better or worse. The creation of these two templates has, arguably, created a future for hundreds of pubs that ran the risk of being marooned in a wet-led community pub cul-de-sac. A former John Barras pub in my home town of Horsham, West Sussex, the Sussex Barn, is a good example. I would pitch up there to watch the occasional football match, and it was about the only time the pub seemed busy. It has now been converted to a Flaming Grill, and there have been occasions when I have turned up, with the family, in search of a cheap and cheerful nosebag and been unable to find a table. 

According to the grapevine, these two value-food brands have consistently led the charge as Spirit has out-performed industry benchmark like-for-likes, as provided by the Coffer Peach Tracker. Meanwhile, S&N Retail’s prime London estate has been given coherence through its upmarket Taylor Walker branding. The demerger of Spirit from Punch also enabled Tye and his team to take control of the 400-plus former S&N Retail sites that had been converted to lease upon Punch’s acquisition. The powerful combination of focus, investment and creativity tends to produce momentum – and such is the story of Spirit Leased.

 

On Wednesday, Tye and his finance director, Paddy Gallagher, provided a commentary on Spirit’s full-year results in the context of a Greene King bid (it was strangely disembodied in the sense that it seemed pre-recorded, and no questions were allowed). Tye and Gallagher were keen to stress the company’s record of progress – a strong branded portfolio, average weekly sales up 25% in four years to £18,100 per pub per week, a 31% cash return on cash invested. They also stressed that Spirit had more potential – 100 uninvested pubs within the estate that stand to benefit from a branded future, a leased estate still 37% uninvested, a new and exciting brand template called Golden Oak Inns, and wider acquisition opportunities within the industry.

 

It is interesting how history can prove the efficacy of particular business models. Both current bidders for Spirit, Greene King and C&C Group, are vertically integrated. Indeed, C&C Group has a number of executives who remember how well vertical integration worked at S&N Retail. It makes you wonder why Scottish & Newcastle, now Heineken, ever sold the estate that is now Spirit, given how scarily low brewing margins are. 

In my book Culture Wars and Moral Panic I describe what I term the health lobby’s “big lie” about alcohol misuse: specifically the claim that there are over one million alcohol-related hospital admissions a year. I discussed how this figure was arrived at by recording all alcohol-related conditions for every patient admitted to hospital, regardless of whether the primary diagnosis that led to their admission was alcohol-related or not. The Office of National statistics (ONS), on advice from Public Health England, has now adopted a new counting methodology for alcohol-related hospital admissions which, because it is more realistic, now results in a much-reduced count – some 300,000 hospital admissions a year are now said to be alcohol-related.

 

The apparent admission that alcohol-related hospital admission numbers have historically been artificially inflated clearly upset all those public health sock-puppets that bristle every time anyone challenges their outrageous misuse of statistics. So they now refer to the “narrow measure” (the one they don’t like) and the “broad measure” (their original big lie). So which of these two measures of alcohol-related hospital admissions is correct? Well, according to Alcohol Concern, neither of them. The organisation has hit on a new variation of the big lie. It works like this: if something that you have being saying for years is true is exposed as a big lie, do not apologise for getting it wrong, and certainly do not try to defend it – simply abandon it and invent another, even bigger lie to take its place!

 

So, on 15 October a number of national newspapers carried a story featuring a new alcohol map compiled by Alcohol Concern that gives a regional breakdown of the best and worst areas for alcohol abuse and hospital admissions for alcohol. For example, in the Daily Telegraph it stated that between 2012 and 2013 some 9.9 million people were admitted to hospital because of alcohol, and about 60% of these ended up in casualty. So, how have we gone from one million admissions, down to 300,000 and then rocketed up to nearly ten million alcohol-related hospital admissions a year?

 

If we look at the ONS figures – which are the official figures for alcohol-related hospital admissions – we can see that they faithfully record the “broad” and “narrow” measures of approximately one million and 300,000 respectively. Not nearly ten million. So how was this huge figure arrived at? Alcohol Concern has been working with some of its chums in the pharmaceutical industry to produce its regional alcohol-related hospital admissions map, which is published on its website. The in-patient admissions and A&E attendances data for 2012/13 are on this map. It then conflates hospital admissions with estimates of outpatient attendances; estimates which are themselves based on “benchmarks” from the Birmingham Heavy Drinkers Project that was conducted between 1997 and 2004; and it also uses the General Lifestyle Survey for 2009, along with the number of high-risk drinkers taken from Local Alcohol Profiles Estimates (LAPE) for 2005. So its numbers are all based on guesses and estimates – some a decade out of date.

 

Now, there is nothing intrinsically wrong with trying to estimate the size of a problem in the absence of real figures; but there are real figures. The ONS has detailed hospital admission data for exactly the same geographical areas that Alcohol Concern has now invented guesstimates for. And there are huge differences between Alcohol Concern’s guesstimates and the official figures. Let us just take two areas as examples: Westminster and Barnsley. Alcohol Concern’s guesstimate is that there were 48,745 alcohol-related hospital admissions in Westminster in 2012/13. The actual number, according to the ONS, is 3,360. In Barnsley, Alcohol Concern says there were 46,992 admissions; the ONS records only 900. In fact the discrepancies are absolutely massive in each and every area and Alcohol Concern makes no explanation as to why its numbers are between ten and 50 times higher than the official ONS statistics. If I was not such a charitable person I might suggest the people at Alcohol Concern had been drinking.

 

We have to remember that Alcohol Concern suffered a catastrophic loss of funding in 2012 when the government withdrew £300,000 of support. So it has got into bed with Big Pharma. Its latest published accounts show that it received donations from Merck Serona, a massive pharmaceutical company and from Lundbeck, the pharmaceutical company that owns the marketing rights to Selincro, a pill that doctors have now been told to prescribe to patients who are “mild alcoholics”. If you look at Alcohol Concern’s latest published accounts you will see that it details all the grants it has received from charitable foundations and the Welsh executive, giving exact amounts of money; but money received from the private sector is not detailed in the same way. So we do not know how much Big Pharma is paying Alcohol Concern to be its shill. Perhaps its new chief executive, Jackie Ballard, would like to tell us to what extent Big Pharma is now bankrolling its operation? But one thing is for sure: after this latest version of the big lie, Alcohol Concern’s integrity is in tatters.

 

 

In recent weeks, the subject of immigration has become a louder part of the national conversation. With Ukip securing its first MP and coming close to winning a second seat, the concurrent issues of immigration and European Union membership have been oft said in the same breath.

 

The common view is that immigration is a bad thing and the exhortations of Nigel Farage have forced political parties of all persuasions to take a position on potential immigration controls. The government is examining ways to cap immigration by introducing an Australian or US-style points based entry requirement.

On a recent vacation, I took the time to consider this issue. Like most employers in the sector, I have come to rely on non-UK labour to fill shifts, and have been grateful for their willingness to work. And compared with most Britons’ experiences abroad, I feel we are many steps behind our foreign competitors.

Britons abroad, generally speaking, do not have the foreign lingo. They are, instead, treated to menus with pictures of the food on offer, aided by waiting staff who speak English with ease, and often three or four other languages to boot. It is not at all uncommon to see a Greek waiter effortlessly switch from English, to German and even Russian before barking back orders in their native tongue.

Language skills are a key skill for the hospitality sector when operating in a global economy, yet only the very largest organisations in the UK have the strength of will to ask for multi-lingual staff or invest in their staff to develop this skill. How many front-of-house staff are encouraged to attend language courses and how many of our hospitality colleges offer foreign languages as an integral part of their vocational training?

Yet the smallest bar on the remotest beach in Kefalonia or Malaga or La Rochelle can attract and retain staff who offer the best in customer service to visitors from across the globe.

Research released during the summer by the sector skills council People 1st highlighted the impact of migrant workers on the UK workforce: 6% of all migrants work in the hospitality sector, filling both a need for staff and a long-term skills gap. The implication of the research was that recruitment of foreign nationals is a necessity. But the continued message in the media is that non-EU immigration is a “bad thing”.

I take a different view. My company provides software systems for small and medium-sized businesses which, in turn, offer high-quality service to customers from across the world. We all work in an environment where good customer service is as important as good performance in any other part of the business. Happy customers are, after all, repeat customers.

So those Polish, Chinese or Hungarian workers who come to our shores are an asset to our workforce. When they choose a job in the hospitality sector, they work hard and welcome the wage they are offered. More importantly, they are well-educated, motivated staff with several languages as well as English and their native tongue.

My company, as it expands across Europe is looking at ways to ensure that our systems are able to work in other countries and are easy to interface with people for whom English is not their native tongue. And as a business we are looking at the complexities of shifting to operate in languages other than English to help us become a global player.

Like many UK business owners, I harbour a deep desire for a home-grown, well-educated workforce which has two, three or four other languages beyond their own and is willing to work in this industry to hone those skills. Just like those French, Spanish and Greek waiters do every summer. But until that happy day, we must welcome the best staff from all over the world to work in our pubs and restaurants and ensure that we offer a world-class welcome to international visitors, wherever they come from.

 

New EU allergen regulations come into force on 13 December. Is this another bureaucratic nuisance or an opportunity for responsible retailers?

 

Food allergy and intolerance is a growing problem. NHS studies show that around 1% to 2% of adults and 6% to 8% of children have been medically diagnosed with food allergies. These figures amount to approximately two million people and do not include those with diagnosed or self-diagnosed intolerances.

 

The 14 allergens covered by the new regulations are: cereals containing gluten, crustaceans, eggs, fish, peanuts, soy beans, milk, nuts, celery and celeriac, mustard, sesame, sulphur dioxide, lupin and molluscs.

 

Operators are required to provide information on the allergen content of all food products – which includes drinks – if a customer requests it. It can be oral or written (you can add it to your menus, blackboard it or a staff member can simply articulate it) but it must be available and it must be accurate. It must be clearly advertised at the point of purchase that the information is available. You can host the information on your website but you must also be able to provide it at the point of purchase.

 

Having worked in the sector pretty much all my working life I was shocked and a little dismissive when I read that lupin was included – but a little digging woke me up. Lupin is sometimes labelled as lupine, lupin flour, lupin seed or lupin bean. The good news is that lupin is present in very few products manufactured in the UK. The bad news is that it can be found in European bakery and pasta products, some of which are imported here. These products include pastry cases, pies, waffles, pancakes, crepes, products containing crumb, pizzas, and deep-coated vegetables such as onion rings. 

 

Ironically, health food stores have been known to sell a larger proportion of products containing lupin than conventional stores, with lupin flour used to market products as gluten-free. A German company includes lupin flour in some of its burgers and sausages, no doubt as a substitute for bread crumbs or traditional flour, to make them gluten-free. The Lancet highlighted a case in 2005 after a 25-year-old woman was hospitalised following a restaurant meal of chicken, chips, and onion rings; the onion rings were found to have been made in the UK using a batter mix made in the Netherlands which contained lupin flour. 

 

A lupin allergy – which could have gone undetected for years or even decades in the UK – can cause the same anaphylactic reaction as peanuts. It is little wonder that surveys show roughly two thirds of allergy sufferers eat out less frequently than average. 

 

As the production and sourcing of food ingredients becomes more global we have to be more vigilant as operators. The new regulations are drawing a line ensuring that the supply chain must be transparent and responsible. For these 14 items, ignorance is no excuse and as none of us would ever wish to harm our customers, we should welcome the clarity and pressure placed on the food manufacturers. 

 

We need to know the 14 items and be vigilant to ensure we are aware when kitchen or food development teams introduce any of these items into the supply chain and the menu. All businesses selling within the EU are obliged to ensure that allergen information is available, including suppliers and manufacturers. We need to look and ensure we are able to pass this on to our guests. Only if you produce the food yourself or directly import it from outside of the EU will the final obligation to determine the allergen content of a foodstuff fall to you. If you have bought the food, the seller is obliged to inform you just as you are obliged to inform your customers. 

 

We should all welcome the introduction of this strengthening of the supply chain and look forward to being able to see unambiguous ingredient lists which help all operators better serve the needs of guests. The supply chain needs to be transparent and joined up throughout Europe so that governments and manufacturers take their responsibilities seriously in the face of growing numbers of the population facing allergy and intolerance. 

 

Knowing what is in the food we sell is a basic responsibility for all foodservice businesses, and allergen sufferers should not have to eat “at their own risk”. Think of the potential untapped market that exists if these allergen decision makers can now have confidence to eat out. That is two million individuals driving decisions for their family and friends. Although it is dangerous to lump allergy and intolerance sufferers together, a YouGov poll commissioned by the Food and Drink Innovation Network suggests that the number suffering from food allergies and intolerances may be as high as 22% – that is 14 million people. 

 

These regulations drive transparency in the supply chain for us, and open up a whole new market for those who translate this transparency into their guest offer. This is a business opportunity. 

 

So mark the date – the law comes into effect on 13 December.

 

And in case you don’t serve food and think this legislation does not affect you – did you know:

• The drinks we serve are classed as food?

• Most beers contain gluten?

• Some wines contain sulphides?

• Any buffet for the darts team is caught by the legislation?