Trade News – November 2019

GREENE KING SOLD

The result of the shareholders’ vote on the £2.7 billion take-over was announced on 9 October. Not surprisingly, given the 50% increase in the share price when the deal was first proposed, 99.4% voted in favour. My guess is that the remaining 0.6% was the CAMRA Members’ Investment Club. There appears to be no scope for intervention by the regulatory authorities. GK has now been delisted from the London Stock Exchange. Curiously, GK have decided to rejoin the British Beer and Pub Association (BBPA) with chief executive Nick Mackenzie immediately joining the BBPA’s board.

The chairman of the All Party Parliamentary Pub Group, Toby Perkins MP, told the Daily Telegraph that he will request a meeting with CK Asset to ‘scrutinise their plans’. He said, “If there is any sense that this is an asset strip rather than a business looking to expand Greene King’s estate, then we would put considerable pressure on local authorities not to allow these assets to be sold.” It’s a noble sentiment but I’m not quite sure how a local authority could stop a sale.

The first issue facing the new owners is a possible strike following the Unite union calling a ballot after rejecting a 2% pay increase and describing the company’s approach to pay negotiations as ‘insulting’.

Meanwhile, efforts are being made to improve the quality of GK IPA. According to the Morning Advertiser, the amount of hops in the whirlpool has been doubled to make the beer more robust. Significantly, service quality is also being addressed, with a new cool storage depot to keep casks chilled until delivery, enhanced training and a new cellar management system.

ADMIRAL TAVERNS EXPAND

I mentioned in the last edition that Admiral Taverns were favourites to acquire 150 pubs from Heineken’s Star Pubs & Bars. This has been completed. Ben Wilkinson, CAMRA’s National Director responsible for pub campaigning, commented, “Far too often, we see large, regulated pub companies offload unwanted sites to property companies or retail businesses with little interest in their long term future. So it is good to see in this case an operator with experience of the tenanted model emerging as buyer – and crucially, that the tenants of these pubs will continue to have the legal protections of the Pubs Code. It is heartening to see Admiral’s initial commitment to integrate these pubs into their estate and their welcoming words to their incoming licensees.”

Admiral subsequently acquired a further 137 pubs from Marston’s for a reported £45 million, bringing their estate to over 1,000. They are however expected to sell on some pubs from both tranches, not necessarily as going concerns. None of the 137 Marston’s pubs are in Greater London.

MARSTON’S CONTINUE TO SELL

The Marston’s sale is understood to be part of their programme to reduce their debt by £200 million over the next four years. Expect more sales. Marston’s chief executive, Ralph Findlay, reported in City AM, said, “We are encouraged by the level of market interest that this portfolio of pubs has attracted. This further underpins our confidence in achieving the accelerated £70 million disposal proceeds target that we have set ourselves for the current year.” The company currently owns 1,537 pubs.

In passing, it is interesting to note that Star Pubs & Bars have disposed of well over 200 pubs this year.

STONEGATE/EI DEAL UNDER INVESTIGATION

The Competition and Markets Authority (CMA) is investigating the planned takeover of the Ei Group by Stonegate Pub Company. This follows the European Commission’s decision to refer the case to the United Kingdom under Article 4(4) of the EC Merger Regulations.

FULLER’S (PUBS) NEWS

Fuller’s have bought the Trinity next to Borough Station. It is understood that they will take over when the current lease expires. It is currently operated by Parched Pubs, whom I don’t recall mentioning before. They still have four well known south London pubs on their books. The Mason’s Arms near Battersea Park Station has now reopened after a refurbishment and, according to the press release, is painted a ‘stand-out shade of turquoise’. Fuller’s have treated themselves to an early Christmas present in the form of Cotswold Inns & Hotels Ltd for around £40 million. To quote the press release, ‘the acquisition comprises a collection of seven high quality, freehold country inns and hotels and eight freehold staff cottages in the Cotswolds, together with two vibrant leasehold bars in Birmingham’s city centre’.

YOUNG’S NEWS

To celebrate their 188th birthday, Young’s gave away free pints of ‘Original’ on 19 and 20 September at selected pubs, so long as you downloaded their ‘app’. The celebrations also included appearances by horse drawn drays. The event also saw the introduction of two new beers: Cityscape, a 4.2% ABV golden ale and Head On, also 4.2% ABV, described as an Indian Pale Lager.

There were rumours when it closed in March that Young’s had sold the Waterman’s Arms in Water Lane, Richmond. Happily, this is not so. They were carrying out works to the building to improve its layout. The pub, which is believed to date back to at least 1660 and was rebuilt in 1898, is scheduled to reopen around the time that we go to print. As previewed in the last edition, the Ram Inn in Wandsworth has now reopened. See the Pub News column for more information.

PUBS OF DISTINCTION SELL UP

The company have decided to leave the pub business and have put their three free-of-tie pubs up for sale. The pubs in question are the Dean Swift (ex Bricklayers) near Tower Bridge, the Old Red Cow near Smithfield Market and the Constitution in Camden. Christies are marketing the pubs as a job lot.

CHANGES AT SHEPHERD NEAME

Miles Templeman is retiring as chairman of Faversham based brewers and pub operators Shepherd Neame after 15 years. He will stand down after the company’s 2020 AGM. He will be replaced by Richard Oldfield who, in turn, will be replaced as a non-executive director by Kevin Georgel who is the chief executive designate of St Austell Brewery.

Shep’s seasonal beer for December will be Rudolph’s Reward, a ‘Festive Light Ale’ at 4.5% ABV. It is brewed with Target and East Kent Golding hops, pale and crystal malts and is flavoured with mulling spices added at the end of the brew. They are also selling their Christmas Ale (7% ABV) in limited edition 500ml bottles in a presentation pack decorated with vintage, Dickensian-style labelling.

MITCHELLS & BUTLER

M &B have reported that like-for-like sales increased by 3.6% during the 51 weeks ended 21 September. According to the Evening Standard, reflecting on the Greene King deal, M&B, which operates some 1,800 pubs including the All Bar One and Toby Carvery chains, is seen as a takeover target. M&B also own the Harvester chain and it is understood that real ale is being discontinued in smaller outlets where sales are not sufficient to guarantee quality.

RAM TAM GOES DARK

Another name change. Timothy Taylors have announced that Ram Tam will henceforth be known as Landlord Dark. It has long been rumoured to be Landlord with added caramel so perhaps the new name is more accurate, if not so romantic.

Compiled by Tony Hedger