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Tue 11th Sep 2012 - M&B, Le Bistrot Pierre and G1 Group

Story of the day:

Tim Martin – pub companies foolish to ask for minimum pricing; Cameron should stop showboating: JD Wetherspoon founder Tim Martin has attacked excessive taxation and minimum pricing in his foreword to the company’s magazine for customers. He said: “Strangely enough, most pub companies and publicans are happy enough to pay relatively large amounts of tax. At Wetherspoon, about 45 per cent of our sales (45 per cent of every pint you buy) goes in tax of one kind or another. Wetherspoon actually contributes half a billion pounds (£500m) of tax per annum, including VAT and beer duty, which equates to £13,000 per week, per pub! Unlike Google or Amazon, Wetherspoon and the pub industry more than pay their way. However, we do object to paying a lot more tax than supermarkets. This is because supermarkets pay no VAT on food, whereas pubs pay 20 per cent, enabling supermarkets to ‘cross-subsidise’ their alcoholic drink sales, to the detriment of pubs. It’s also to the detriment of pub-goers who consequently subsidise dinner parties in the affluent suburbs of Britain as dull dinner-party types scoff their VAT-free food. In order to counter the supermarket threat, some pub companies foolishly urged the government to introduce minimum pricing, which does nothing to alleviate the tax disparity which is at the heart of the issue.” Martin also criticised Prime Minister David Cameron for bringing in the late-night levy which will cost Wetherspoon £2m a year. He said: “The implicit message from Cameron is: I want to be seen to be doing something about binge drinking, so I’ll make it even more expensive to go to the pub. People can therefore go to supermarkets, increasing the amount of unsupervised drinking outside of pubs. I know that it doesn’t make sense, but voters won’t see through it and will give me credit for doing something about binge drinking. David, you can only fool some of the people some of the time. Cut out the publicity stunts, roll up your sleeves and look at this issue in detail. If you’re serious about supporting pubs, create tax parity with supermarkets. If not, at least do everyone a favour by cutting out the showboating.”

Industry news:

Paul Chase – Panorama programme marred by inaccurate claims: Leading on-trade alcohol commentator Paul Chase has argued that last night’s Panorama programme was marred by an “absurdly exaggerated claim of how many lives could be saved by a minimum unit price (MUP) of 50p”. He said: “The claim was that “up to 50,000 pensioners lives could be saved over 10 years” – an average of 5,000 lives saved a year. There were in total 8,790 alcohol-related deaths reported in England in 2010 for all age groups. This number only relates to deaths directly caused by alcohol. However, the North West Public Health Observatory also provides estimates of all deaths which they claim are wholly or partly attributable to alcohol by using the false counting methodology of ‘alcohol-attributable fractions’. This involves adding together deaths directly caused by conditions such as alcoholic liver disease, to those where the deceased may have had an alcohol-related medical condition, such as high blood pressure, that will be credited with having contributed to their death! By adding up all these alcohol-attributable fractions they arrive at a total of 14,982 alcohol-attributable deaths in England. Of these, 5,803 were people aged over 65. So, using this questionable counting method 58,030 over-65s may die of an alcohol-attributable cause over the next ten years, but Panorama claims a MUP of 50p would save 50,000 of them – 86 per cent! Let’s hope our political leaders are not as gullible or innumerate as the producers of Panorama!”

Northern Ireland licensed retailers join call for reduced VAT in tourism: A trade body in Northern Ireland has called for a cut on VAT for tourism businesses in line with rates in Eire – currently set at nine per cent. Pubs of Ulster said cutting VAT for restaurants and other businesses serving food could potentially create around 3,000 jobs, as well as improving tourism. Colin Neill, chief executive of Pubs of Ulster, said: “Pubs of Ulster has a wide membership base, consisting of bars, café bars, restaurants and hotels and we as their representative body are keen to support them in achieving greater prosperity.” A reduced VAT rate in the Republic of Ireland has created 6,300 jobs in the tourism sector since it was introduced as a job stimulus.

LivingSocial changes tack to become Waitrose of daily deals sector: LivingSocial is aiming to establish a different market position from Groupon with an emphasis on “quality of offers” and repeat business. General manager Peter Briffett told Marketing Week: “The people that survive in this space need to maintain levels of excitement with their audience and high levels of customer service – this is not about being the biggest: 87 per cent of businesses who work with us want to work with us again.” Head of sales Nigel Clarkson added: “Our brand is different: we are Waitrose. Maybe we don’t have as many customers as Tesco but that’s not what we or they want to do. We don’t have any ASA complaints that have been upheld about us this year and the majority of our merchants want to come back to us.”

Zagat – London restaurant scene improving: Restaurant guide Zagat has reported that 40 per cent of 9,583 respondents think the dining scene has improved from a year ago. Those surveyed claimed they are spending 30 per cent more on eating out in London as 62 “notable new entrants” entered the UK market. However, Londoners still only eat out an average 2.2 times a week, which is below the rates for New York, Paris and Tokyo, where diners eat out between three and four times a week. The Zagat 2013 guide found those surveyed rated Italian as their most popular cuisine, with 25 per cent of votes, followed by French (17 per cent) and Japanese (14 per cent). Only one in ten diners said British food was their favorite. The top ten list of most popular London restaurants is: 1. Wolseley (1); 2. Hakkasan (7); 3. Le Gavroche (9);  4. Ivy (5); 5. River Cafe (11); 6. Ledbury (10); 7. Gordon Ramsay (2); 8. J Sheekey (3); 9. Dinner by Heston Blumenthal (-); 10. Gordon Ramsay at Claridge’s (6).

Duty escalator nears target: The e-petition aimed at triggering a House of Commons debate on the duty escalator has moved to within 4,000 signatures of its 100,000 target. The e-petition moved beyond 96,000 signatures yesterday. The e-petition states: “Removing the beer duty escalator at the next budget will help keep beer more affordable and go a long way to supporting the institution that is – the great British pub”. 

Company news:

Douglas Jack – Alistair Darby appointment to M&B kills Greene King nil-merger prospects: Numis Securities analyst Douglas Jack has claimed that the appointment of Marston’s chief operating officer Alistair Darby to the chief executive position at Mitchells & Butlers (M&B) is “excellent news”. He said: “We believe this appointment has full shareholder support; and this paves the way for the company to make independent non-executive director appointments. The big discount relating to corporate governance should now reduce, in our view. We are raising our target price to 350p (equating to 8.6x EV/EBITDA) from 325p. Alistair Darby was not appointed against shareholder wishes; and there are plenty of initiatives (including the Ways of Working operational management process and the expansion programme) to keep the new chief executive busy. All those initiatives are ongoing and already have shareholder support. For Marston’s, we expect little to change with what has otherwise been a very stable management team. Peter Dalzell (managed and franchised pubs) and Stephen Oliver (tenanted/leased pubs and brewing) will now report directly to Ralph Findlay (CEO). Operationally, no change should result. For Greene King, this appointment should extinguish any faint hope the company may have had of achieving a nil-premium merger with M&B. With or without M&B’s recruitment of an ex-Marston’s director as chief executive, we believe M&B would expect Greene King to pay a significant premium in any merger. M&B has a (five per cent) smaller market capitalisation than Greene King despite generating 15 per cent more PBT (42 per cent more EBITDA). Given the high quality of M&B’s estate, we believe the company’s higher profitability (and good growth prospects) should now be better reflected in its equity valuation.”

Bob Ivell – Alistair will take on the M&B challenge with relish: Mitchells & Butlers executive chairman Bob Ivell told Morning Briefing that Alistair Darby had the “unanimous support” of the board and that the Marston’s executive is “very comfortable” with the current change programme at M&B. Ivell added: “Alistair is free to look at it and have his own influence on it. Between the two of us we’ll get M&B to where it needs to be. I think the opportunities for M&B are massive. We’ve got a platform now and we’re in a position to move forward and I think Alistair will grab that with relish.”

Propel Background Briefing: Alistair Darby is steeped in pubs and brewing – his father Charles Darby ran the Mitchells & Butlers predecessor Bass for a period. Darby was recruited to join Marston’s by current chairman David Thomspon, who met him for his initial interview whilst sweeping up the car park outside the brewery headquarters. Darby asked Thompson for directions and was surprised to find Thomspon re-appear, without a broom, in the interview room. Darby made his mark during his 15 years at Marston’s. He has a reputation as a radical thinker. He oversaw the roll-out of the company’s Retail Agreement in the tenanted division, which broke new ground by applying managed disciplines within bottom-end pubs. The innovation produced improved turnover and lower licensee churn – it’s currently running at around ten per cent. Darby also championed the multiple brewery strategy, betting that Marston’s would benefit from having greater regional cask ale provenance through a network of five breweries. On the Charles Darby link with Bass, food writer and public relations consultant John Porter has wryly observed: “There’ll be a few family brewers thinking, ‘Finally, a sensible approach to succession planning at M&B’.” It was clear yesterday that Darby is regarded with great affection at Marston’s, with his mentor and current chairman David Thomspon issuing a particularly warm valedictory note: “The board would like to thank Alistair for his valuable contribution to the business during his 15 years with the group. We wish him all the very best for the future.”

Taco Bell wins recognition for most engaging Facebook post: US chain Taco Bell has achieved recognition for the most engaging Facebook post, according to a survey by Expion reported in Nation’s Restaurant News. Its post on 23 May this year in support of the chain’s philanthropic effort aimed at preventing teens from dropping out of high school, Graduate to Go, received more than 87,000 likes and 522 comments. Two of Taco Bell’s three most engaging Facebook posts were photos of teenagers in high school graduation robes, aimed at promoting Graduate to Go. Only one in five of the 100 most engaging Facebook posts were straight-forward promotions. The most engaging Facebook post by Taco Bell stated: “Did you know that one in three teens drop out of high school every year? For every 'like' on this post, Taco Bell will donate $5 to Graduate to Go to help more teens graduate high school. Up to $1 million!”

Micropub set for Worthing: A new micropub is set to open in Worthing - applicant Nigel Watson is to transform a former health centre into a pub. The Anchored in Worthing will not serve food except for the odd bar snack, will have no gaming machines or even a bar. Watson is also seeking shorter opening times with the pub closing at 8pm Monday to Saturday and at 3pm on Sunday. Watson said: “A micropub is an establishment far removed from the modern concept of what a pub is. Indeed it is almost a step back in time. The model for a micropub is small size with low costs and maximum use of space, no keg beers or lagers so no complicated equipment or bar required and interesting choices of locally sourced ales.”

Le Bistrot Pierre set for tenth site: Le Bistrot Pierre is to hit double figure site numbers with a planned opening in Plymouth. The new venue will be housed in the New Cooperage building within Royal William Yard and is expected to open in February next year. Robert Beacham, co-owner of Le Bistrot Pierre said: “Plymouth was outside the area in which we were looking but the opportunity was so incredible it really was too good to miss”.

McMullen’s buys Buckinghamshire pub for sixth Chicken & Grill venue: Hertford-based McMullen’s has bought The Britannia in Marlow and will-re-open it in November after a refurbishment to convert it to its sixth pub with a Chicken & Grill pub menu. Managing director Peter Furness-Smith told the Buckinghamshire Free Press: “We are keen to get the work started and hopeful we will be able to open in November but such a tight time table will also require the support of the planning department.”

Stonegate re-opens a Scream with a small bowls section of the menu: Stonegate Pub Company has opened a Scream venue in Glasgow, The Ark, after a £300,000 refurbishment. The menu offers a tapas-style “small bowls” section with an emphasis on offering value for student customers. Scream marketing manager Olivia Brooks told Eat magazine: “Students have to watch their budgets and control their money, more so than any of our other customers, so pooling together and buying rounds and then splitting the costs isn’t something that they tend to do. We’ve conducted research which tells us that they prefer to buy their own drinks and dishes so the small bowls sections mean that they can keep track on their spending whilst still sharing with friends.”

Mitchells & Butlers to open 205th Harvester in Nottingham: Mitchells & Butlers is set to open its 205th Harvester in Nottingham’s Castle Marina today – the site is a retail development around half mile from the city centre. The opening follows hot on the heels of an opening at Tyneside’s MetrOasis development, alongside a Toby Carvery, last week. The brand has extended its free ice cream Sundae offer beyond the summer, redeemable through a downloadable voucher that also provides an alternative pound off any dessert.

Marston’s bags prime Suffolk site: Midlands-based Marston’s has acquired a prime Suffolk site for a new-build pub restaurant. The company has bought a development site on the 30-acre Haverhill Research Park from developer Carisbrooke Investments. Taylor Wimpey is expected to build 350 homes next to the site having bought a 9.17 acre patch of land from Carisbrooke. Marston’s is developing the proposals and will submit a detailed planning application in the coming weeks. Mike West, Marston’s Inns and Taverns estates manager, said: “This is an exciting time for us, we are the only pub company that is embarking on such a large programme of quality, family-focused new-build pubs.”

New cocktail bar set for Soho: Bittersweet, a new cocktail bar and members club, is to open in Kingley Court, Soho on 24 September. The venue will open between 5pm and midnight between Monday and Wednesday and between 5pm and 3am Thursday through to Saturday. 

Harris + Hoole makes high profile appointment: Harris + Hoole, the expanding artisan coffee shop concept backed by Tesco, has made a high profile appointment - former SSP operations director Peter Davies is joining the company as its as its chief operating officer. The company has also acquired 15 former Clinton Card sites – it’s already opened in Amersham and Uxbridge with a Ruislip venue in the pipeline. Meanwhile, Tesco employees Jonathan Lloyd and Michael Holmes have joined the board.

G1 Group signs wine supply deal with Inverarity Morton: G1 Group, the Scottish managed and tenanted operator headed by Stefan King, has signed a three-year supply deal with drinks distributor Inverarity Morton. G1 Group has been a client of Inverarity Morton's (formerly Inverarity Vaults and WM Morton) since 2003. David Tracey, director of brands and standards at G1 Group, said: “We have had a sustained relationship with Inverarity Morton and are looking forward to developing and building upon this over the next three years. The training and service quality Inverarity Morton can deliver will be greatly beneficial to our staff at every level of the organisation.”

D&D Restaurants opens £50m London hotel: Quaglino’s operator D&D Restaurants has opened the £50 million South Place Hotel, which has 80 bedrooms, two restaurants and three bars, in the East End of London. Chief executive Des Gunewardena, said the move reflected the transformation of the eastern parts of London. He said: “When we opened the Great Eastern Hotel ten years ago I felt very strongly that the whole of London was moving east. For many years people thought you could not open good restaurants in the City, but now it is becoming a 24-hour place to live and work.”

Pub brings in better burger offer: The Old Crown pub in London’s New Oxford Street, run by Dave Aherne, has drafted in the organisor of the Burger Breakout pop-up to revamp its food offer with a focus on “better burgers”. Burger Breakout boss Dave Aherne told Hot Dinners: “When I met Ed Salter at The Old Crown and he was looking to change the direction of the food offering at the pub. It's always buzzing with people enjoying a drink and hanging out with friends but the menu wasn't really working.”

Flood-hit Punch pub is acquired from disposal list: An unnamed local investor has stepped in to buy a pub in Hebden Bridge placed on the disposal list by Punch Taverns after serious flooding on two occasions during the summer. The investor has bought The Railway in Hebden Bridge with a re-opening expected within the next two months - previous tenants Keith and Sharon Hobbs and their daughter Michelle will remain at the pub.

Antic pub closes after sale at auction: A pub run by 30-strong Antic, The Old Fire Station pub in Hammersmith, has closed after it was sold at auction. It is thought the pub has been acquired by a supermarket. A spokesman said: “Antic had been renting the building on a month-to-month basis and had tried a few times to buy it at auction. Then earlier this week they went to buy it again but were outbid and that was that.”

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