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Parliament's vote in favour of scrapping the beer tie as part of the statutory code is going to cause havoc but is excellent news for all the long suffering leaseholders & tenants of Punch & Enterprise. Green King will now pull out of the Spirit takeover.
I wish I was down the pub! Fed up with waiting to see whats going to happen to this lot. I still think if the statutory code goes through parliament and the bond holders do not agree to a debt restructure they are stuffed (just like the leaseholders & tenants!).
The "core" estate consists of struggling licensees & tenants paying excessive rents and tied prices many of whom will cease trading in the coming months/years. The business model cannot work in it's current format. If and when the government's statutory code of practice comes in to force the company's revenues, in theory, will reduce significantly over time. How can the restructured debt be serviced? Further asset disposal? What is the true valuation of the estate?
I know one of their tenants who runs an excellent pub but cannot make a decent living due to massively high rent and the fact he has to buy all his draught beers from Punch (they brew nothing) at prices that do not allow anything like a decent margin. The freehold value of the pub has halved since Punch purchased it some years ago. The current business model will never work.