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Morning Briefing Strap Line
Fri 29th Jul 2016 - Friday Opinion
Subjects: To grasp Brexit opportunity the leisure sector must focus on 2017 rents and rates double whammy, the perfect pint, and media-driven moral panics
Authors: Nigel Ball, Glynn Davis, and Paul Chase

To grasp Brexit opportunity, the leisure sector must focus on 2017 rents and rates double whammy by Nigel Ball 

It has been a tumultuous month in which the old order has been turned on its head. But for all the heat generated by voters’ decision to leave the European Union, the impact this will have on the leisure sector is still unknown. The short-term economic uncertainty created by Brexit could hit consumer confidence and consumer spending. On the other hand, the devaluation of sterling might provide a boost to tourism, although it could also impact import and consumer prices, creating inflationary pressures.
JD Wetherspoon chairman Tim Martin argued this month that by “voting to restore democracy in the UK” the country’s economic prospects would improve. It is clear the leisure sector must prepare for both the threats and opportunities that Brexit may bring. This means getting on the front foot now, and planning ahead for what is likely to be a significant rise in property costs next year, and one that will be exacerbated by predicted price rises in food and staff.
On 30 September this year, the draft of the first business rates revaluation in seven years will be published. Based on our own rental information we expect rateable values could rise by about 55% in the West End and 20% in the City of London in April 2017. Manchester is another city that’s hardest hit, with increases of 25% expected, and Newcastle, Edinburgh and Glasgow are expected to see hikes of 19%, 10% and 10% respectively.
And the uniform business rate in England is also likely to remain in excess of 50p in the pound, its highest ever rate following a revaluation. This comes amid concerns for the sustainability of rents that are being paid by operators. These have hit historical highs in central London and other strong city centres due to the competition for new sites. For example, Soho rents are now claimed to exceed £140 per square foot, up from £70 to £80 per square foot a few years ago.
The message for leisure sector occupiers, who may already be paying top-of-the-market rents, is clear: it’s crucial to budget for the impact business rates will have on your bottom line from April 2017. Knowing a significant rates rise is on the horizon, it is important to factor it into rent review negotiations right now. And for landlords, it will be ever more important to select the right operator for a site, one that has a longer term sustainable business, rather than just the highest bidder.
The need for quick action is even greater given changes to business rates appeals that are coming down the track. The scale of the increases that are forecast means businesses’ ability to speedily appeal their properties’ rateable values is crucial. Unfortunately, the government seems set to make an already cumbersome and lengthy process even worse.
The “check, challenge, appeal” system to be introduced in 2017 puts many barriers in the way of securing a quick and accurate resolution. A simple appeal will likely take at least three years before an incorrect assessment is amended and refunded. For many it will take much longer. Not only that, but by restricting the ability of the Valuation Office to give ratepayers information on how their rateable value is calculated, it discourages transparency and is fundamentally unfair. In fact, it appears the government would prefer you do not challenge the assessment at all. 
We are currently working with industry groups, such as the Association of Licensed Multiple Retailers, to lobby for changes to the proposed process, but it looks like the principle is here to stay, whatever Brexit may bring.
Nigel Ball is head of leisure at BNP Paribas Real Estate

The perfect pint by Glynn Davis

Normally when my home town of Doncaster hits the news it is for rather unpleasant reasons like corrupt town councillors, record breaking unemployment levels, lowest ranked educational standards, or shocking mistakes made by social workers. (Just to clarify, some of these I’ve made up – the town’s not that bad).
Thankfully some good news emerged recently. Doncaster was rated the best for people having the highest chance of receiving a perfect pint of beer. The survey from Cask Marque and Vianet found people in the town are likely to receive four perfect pints out of every five they buy in contrast to the country’s worst performing town/city, Reading, where it is 50/50 whether you receive a perfect or poor pint.
Armed with this interesting fact it seemed a perfect time to return to the town to gauge the quality of its beer but also to see how it has adapted its offer to today’s drinkers and whether the craft beer revolution seen in our major cities is impacting on this secondary town. It has been some years since I’ve spent a Saturday evening in Doncaster town centre and I have no reason to believe what I experienced would be dramatically different in other towns and cities of a similar size and demographic characteristics.
The overriding conclusion was the obvious polarisation that has occurred among its drinking establishments. At the one end are a high proportion of pubs offering a high-octane mix of swift intoxication and ear-splitting music. These would clearly be defined as good-time-bars and the town centre has more than its fair share of them. That there are plenty of such places is not that surprising because when I was younger many of the town’s old school boozers were making the first shifts towards appealing to the younger end of the market by stripping out their original interiors and cranking up the sound systems. There just seems to be a few more of them nowadays.
But what you also now see in the town – at the polar opposite of these music-led bars and pubs – is the beer revolution having its effect and helping bring some interesting additions to Doncaster town centre. The Marketplace Alehouse is only a couple of years old and is probably at the vanguard of beer drinking in the town – but without overdoing it to the point that it is reverential. It started out as a bottle shop with a modest amount of space for drinking inside but it has morphed into being predominantly a bar – with a number of tables and five kegs and five casks as well as an interesting mix of tapas and sharing platters.
This is just the sort of place that is beginning to appear in secondary towns around the country that mix cafe/bar/pub/bottle shop to create a relaxed enjoyable environment. But what about the quality of the beer? Was it perfect or not? On this visit the Hops & Dreams from The Brew Foundation tasted just as it should (one out of one perfect).
The town now also has its own brewpub (from Doncaster Brewery), which recently opened in a former retail unit on a secondary pitch that has been fitted out on an extremely limited budget. It is very much like the micro-pubs that are springing up around the country. It has a bit of a Working Men’s Club look and feel about it but this can be forgotten because it has six beers on offer that are produced only a few feet away from the bar. A brewpub is something Doncaster has not had for the best part of 30 years and it says a lot about the appetite for locally produced beers and provenance. As for the quality – the Stirling Coffee Stout was perfect to my taste (two out of two).
Sticking with the calm end of the drinking rainbow two old stalwarts of the Doncaster drinking scene, The Mason’s Arms and The Plough are still delivering on their promise of being traditional pubs but this is where the squeeze is happening in the market. It is clear the former has moved with the times somewhat by enhancing its treasured interior with some feminine touches like fairy lights, mix-and-match furniture and a decent wine list. But in contrast, the latter continues to plough its own furrow and as such there was not a female customer in sight on my visit. Sadly there have to be some questions asked about the sustainability of rigidly sticking to the old ways.
While it doesn’t need to join the ranks of the nightclub-lite bars a makeover like the Mason’s might be a route to securing its future. As for the beer, the Tetley’s in The Mason’s adhered to the Cask Marque survey, and the same could be said for the Barnsley Bitter from Acorn Brewery served at The Plough (four out of four).
The visit to The Three Horseshoes, on the edge of town, proved Cask Marque and Vianet had got it spot on. Maybe going for Wolf Rock Red IPA from Sharp’s was pushing it a little as it did look to be a rather unusual beer among the largely bog standard mix on offer in this very traditional locals pub. So it proved and I sent it back as undrinkable (four out of five).
The fact the barman took it back without hesitation and with an apology probably says more than any survey about how things are progressing for the better in our pubs up and down the country. The last time I was drinking in Doncaster town centre, if I’d merely hinted to the licensee that he was selling imperfect ale I’d have been shown the door, followed by his boot firmly exerting pressure on my backside, and just for good measure the locals would have likely chased me down the road.
Glynn Davis is a leading commentator on retail trends

Media-driven moral panics by Paul Chase

Cancer equals death. And sooner rather than later, or at least that’s the public’s perception. So any link between alcohol and cancer implies precisely that equation and is therefore guaranteed to generate headlines. So last week headlines in the I-online and Guardian newspapers that screamed “Alcohol directly causes seven kinds of cancer, says study”, and “Proof: drinking alcohol causes cancer” were designed to alarm public opinion and to feed into the ongoing “public health” narrative that “there is no safe level of alcohol consumption”.
So, presumably, in order to justify these headlines there must be some new weighty piece of research that’s been published, or perhaps a meta-analysis of numerous other peoples’ research that give us, finally, irrefutable proof of this claim. But actually nothing of the sort! What the newspapers were referring to was an opinion piece by an academic named Jennie Connor, who works at the University of Otago, New Zealand, and that was published in the Journal “Addiction”. It consists of just over 3,700 words plus references.
Without wishing to be overly pedantic, it is not “alcohol” but the drinking of alcohol, mostly in copious quantities, that causes a number of different cancers and there is nothing new in this claim nor is it, for the most part, disputed. The issue here is about which alcohol-related cancers require the drinker to really work at it by drinking to excess and that can be triggered by relatively low levels of consumption. 

The alcohol mortality statistics for England show more than 80% of deaths from diseases caused by alcohol consumption are deaths from alcoholic liver disease (4,333 in 2014) and liver fibrosis/cirrhosis (1,520 in 2014). Bear in mind some 28 million people in England drink alcohol on a weekly basis, so these drinkers are at the extreme end of consumption – often drinking in excess of a bottle of Scotch a day for many years.
The claim made in the article by Connor is alcohol-attributable cancers make up 5.8% of all cancer deaths worldwide. But if you look at the alcohol mortality statistics for England you will not find any recorded deaths from lip, oral cavity and pharynx cancer, oesophageal cancer, colorectal cancer, or cancer of the larynx. As I said above, alcohol-related deaths are mostly caused by alcoholic liver disease or liver fibrosis/cirrhosis. Curiously, there is no reference to deaths from alcohol-related breast cancer in the official figures, but studies estimate about 94% of breast cancers are linked to causes other than alcohol, so separating out alcohol-related breast cancer, let alone those cases that result in death, is extremely speculative.
And this is the crux of the matter: at what point can we say that a statistical association between alcohol consumption and a disease becomes sufficiently well established to conclude the relationship is causal? For what it’s worth, I think Connor’s claim the statistical association is strong enough for us to conclude alcohol consumption causes cancers at seven sites is probably correct (oropharynx, larynx, oesophagus, liver, colon, rectum and female breast). But with the exception of the liver and a tiny minority of breast cancers these cancers are rare and rarely result in death.
The link between alcohol consumption and some rare cancers needs to be balanced by an appreciation of the clear proof there are overall health protective effects from light to moderate drinking, particularly in relation to heart disease and stroke. I am of course talking here of the famous j-shaped curve that shows regular, moderate drinkers live on average longer lives than either heavy drinkers or “never drinkers”, and are less likely than “never drinkers” to die of heart disease or a cancer. Connor, in her article, casts doubt on that hypothesis and space prevents me from going into detail on that, although I have done so in previous articles. Her scepticism of the j-curve hypothesis rather spoils what is otherwise a rational article that largely avoids bias.
My main criticism is of the media. Even supposedly “high-brow” newspapers like the Independent and the Guardian cannot resist the temptation to use a wowser headline by bigging-up an article that contains nothing new into a “study”, when it isn’t. This is how moral panics are started and sustained by a public media that creates and perpetuates myths that get repeated so often they become “well-known facts”. Are the media behaving cynically? Does it know it’s doing this? This quote sums it up for me: “Among the calamities of war may be justly numbered the diminution of the love of truth and the falsehoods which interest dictates, and credulity encourages.” – Samuel Johnson, The Idler #30, November 1758.
Paul Chase is a director of CPL Training and a leading commentator on on-trade health and alcohol policy 

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