Swathes of pub tenants have warned that grassroots workers running pubs face an ‘existential threat’ if rental fees are not scrapped completely for the duration of the coronavirus pandemic.
Speaking to This is Money, Ed Anderson, 45, a publican with three pubs in Cheltenham and 25 years of experience in the industry, said it was ‘absurd’ that some landlord pub holding groups had failed to cancel rental fees during the pandemic.
Typically, a pub tenant’s rental fees are derived from the pub’s finances. But, with no cash coming in, publicans like Ed face a huge financial hurdle, particularly if rental costs are simply deferred rather than temporarily scrapped altogether.
An online social media campaign called #NoPubNoRent is calling on major pub groups like Star Pubs and Bars, Stonegate (Ei Group) and Greene King to cancel rents for tenants while the pandemic rages.
In trouble: Experienced publican Ed Anderson (pictured far right) has branded the behaviour of some pubcos on the rent issue ‘absurd’
#NoPubNoRent! The British Pubs Confederation are naming and shaming pubcos it believes aren’t doing enough for its renting tenants
Mr Anderson runs The Vine, The Railway and The Swan, which are all located in Cheltenham. He operates under two big names in the pub group sector, namely Marston’s and the Ei Group. The Ei Group is now part of the Stonegate pub group.
He says that the pubcos he deals with have said that ‘they will not collect rent now but they will continue to charge for it’.
‘It’s absurd, I save up every month to pay the rent from the income the pub takes. I cannot save up £70k in the next six months with no income.’
Mr Anderson thinks that if the pubcos he’s involved with scrapped their rental fees for the duration of the pandemic then ‘we could reopen the pub and continue doing what we love in our communities when this is over.’
‘This is an existential threat to all publicans who are getting charged rent for a pub that does not exist,’ he added.
All of Mr Anderson’s staff have been furloughed and he says that if he is forced to pay rent and his pubs fold, everyone in his teams will have to apply for the Universal Credit benefit.
The risks are clear. Mr Anderson and his team face losing their jobs and their livelihoods, while Cheltenham risks losing some of its best pubs.
Commenting on its pandemic policy for renting tenants, an Ei Group spokesperson told This is Money: ‘We are and will continue working in partnership with our tied publicans throughout this unprecedented pandemic, ensuring they are kept up to date with Government and practical support available for their businesses as well as deferring collection of rent and fees, which we will keep under constant review.
‘In the small percentage of our commercial properties, we are liaising with our tenants and taking measures to assist with their business cash flow.’
Meanwhile, Marston’s said: ‘We are highly aware of – and sympathetic to – the challenges facing our tenants currently and have suspended all rent payments until further notice.
‘We are also providing additional support through our field team to ensure tenants are making full use of the additional Government-assisted financial support open to them.
‘The vast majority are eligible for the Government’s Self Employed/Small Business support scheme and Marston’s has also committed to credit our tenants for all opened keg and cask supplies when pubs reopen. We will continue to work with our pub tenants to support them over this challenging period.’
A sector in disarray
The pub sector has been thrown into chaos, with thousands of establishments at risk of cutting jobs and shutting up shop for good once the pandemic ceases.
On the evening of Friday 20 March, Prime Minister Boris Johnson took the extraordinary step of ordering all pubs and restaurants, with the exception of takeaway outlets, to close by the end of the night.
He’s gutted: Pint loving Boris Johnson forced pubs to close late last month
The Government stepped in with a package of measures, including agreeing to pay 80 per cent of people’s pay packets up to £2,500 a month, to protect pubs and their staff from the financial bloodbath and tsunami of job losses looked set to ensue. But, many still face financial ruin.
Pubs might also be able to get a Government grant of up to £25,000 if their pub has a rateable value of between £15,000 and £51,000.
The magnitude of the decision to close pubs was not lost on the Prime Minister, who admitted the move went against the ‘inalienable free-born right of people born in England to go to the pub’.
What is the #NoPubNoRent campaign?
Greg Mulholland, the chairman at the British Pubs Confederation, told This is Money that the #NoPubNoRent online campaign was a ‘grassroots’ cause aimed at getting pubcos to take notice of their stricken tenants’ plight.
Cheltenham-based publican Ed Anderson said the campaign was founded by a group of publicans who were in contact with each other on Facebook trying to figure out how they would continue paying rent with no cash coming in.
Mr Anderson said: ‘The aim is to unite publicans in one voice, with some public support, so that the pubcos hear our message, do the right thing and cancel the rent.’
‘It’s a scandal that some pub owners, including some of the largest pubcos are still charging rent to pub tenants during the forced closure as a result of the Covid-19 crisis’, the British Pub Confederations’ Greg Mulholland told This is Money.
Mr Mulholland said the British Pub Confederation would ‘name and shame’ all pub groups who are refusing to cancel rents during the closure, but also praise those taking positive steps to help their tenants.
He said: ‘So we call on pub-owning companies with tenants to do the right thing and support licensees during this crisis and their complete loss if income which must mean no rent.
‘If they do not, they will create hardship for thousands of publicans and will be directly responsible for the failure of many pubs and will not be forgiven by the British public. We ask all pub lovers to support their local pubs and publicans and tell the pubcos and Government, #NoPubNoRent.’
Hint of good news
The British Pub Confederation’s ‘naming and shaming’ table containing the names of pubcos it claims aren’t doing enough for their tenants also includes companies it suggests are going the extra mile during these turbulent times.
Admiral Taverns, which features on the upbeat side of the organisation’s table, told This is Money it had scrapped rental fees for its pub tenants from 21 March to 30 April and will keep this end date under review.
According to the Campaign for Real Ale, Fullers has also cancelled rental fees for pubs on its books.
National Chairman of CAMRA Nik Antona said: ‘CAMRA welcomes the move by businesses such as Admiral Taverns and Fullers to cancel rent for their pub tenants in recognition of the unique circumstances we are in.
‘We are now calling on other pub owning businesses to follow those examples and listen to the concerns of tenants, and of pubgoers who want their locals to survive this crisis’.
The British Pub Confederation has written to Martson’s demanding it cancels tenant rents
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