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Wed 19th Nov 2014 - Punch - “we’re considering implications on investment and disposals”
Punch – “we’re considering implications on investment and disposals”: Punch Taverns has stated that it considering the implication of yesterday’s House of Commons vote in favour of market rents in the sector for its investment and disposals plans. The company stated: “Punch has been at the forefront of improving the support for pub tenants across the sector and we remain committed to a sustainable future for British pubs. However, the amended Bill (should it proceed through Parliament in its current form to become law) would have significant adverse consequences for Britain’s community pubs. The government’s own research indicated that breaking the tie would be expected to result in between 700 and 1,400 more pubs closing with 3,700 to 7,000 job losses. Furthermore, we believe that the amendment would be likely to have the effect of reducing pub investment, reducing consumer choice and exposing tenants to higher fixed rents, reduced levels of support and greater risk of failure. Punch’s view is that the amendment would lead to the creation of an unworkable two tier economic market and would be contrary to existing legal contracts and property rights. It also runs contrary to the OFT’s view when it considered a super-complaint from CAMRA in 2010 and concluded that tied tenants were able to compete effectively and that the commercial interests of pub companies and their tenants were aligned. We are currently considering the potential impact of the amended Bill on Punch, including the implications for our substantial pub investment program and our disposal plans.” David Forde, managing director of Heineken, which owns Star Pubs & Bars, said: “What the Great British pub needs most is sustained investment to improve standards and attract more customers. If enacted, the Market Rent Only option would effectively break the beer tie, threaten vital investment and damage pubs. This year our Star Pubs & Bars business invested £18m to improve our pubs. We know that with the right lessee, in the right pub, backed by the right investment our model benefits lessees, the community and us as the brewer. These changes would threaten that partnership and make it more difficult for people to enter the market and own their own pub. We urge Parliament to think again before this poorly thought out proposal becomes law.”

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