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Thu 21st May 2020 - Greene King announces 90% rent reduction for tied tenants
Greene King announces 90% rent reduction for tied tenants: Brewer and retailer Greene King has announced a multimillion-pound investment in the next wave of financial support for its tied tenants to help them through the coronavirus crisis, which will see rents reduced by 90% for all tied pubs from 11 June until they can legally reopen. The 90% concession will continue during the first four weeks a pub can legally reopen. Following this period, 50% rent concessions will be offered. As well as the rent concessions, tied tenants will receive eight weeks of trade support when buying barrels of beer or cider from Greene King after pubs reopen. The decision follows the first wave of financial support from Greene King Pub Partners that covered the initial 12-week period from 18 March to 10 June. This involved the launch of a Partner Support Fund and one-to-one discussions with all 975 tied pubs to understand their immediate financial situation and ascertain which pubs needed immediate rent concessions as they had not been eligible for any government grants. Pubs with a rateable value under £51,000 have been eligible for a government grant up to £25,000 to allow businesses to continue paying fixed costs, such as rent. So far about £4m of rent concessions has been made by Greene King Pub Partners through its support fund to tied tenants to cover the initial 12-week closure period. All rents have also been deferred for Greene King tenants since 17 March while pubs are closed and then further support has been rolled out in stages. Wayne Shurvinton, managing director of Greene King Pub Partners, said: “From the outset balancing as much support for our tenants as we possibly could alongside ensuring the long-term survival of Greene King has been our priority. We feel we’ve played our part and it is critical the government continues to play its part in supporting our sector. The support so far is extremely welcome but as a tenant ourselves with more than 500 landlords, we have not received rent concessions in the way we are offering them to our tenants and further support on rent payments is needed to support the recovery of the pubs sector.” In March, Greene King Pub Partners also pledged to replace all unopened kegs and casks in tenants’ cellars that will be out of date when it comes to reopening. Tenants have completed a stock survey of what barrels will need replacing and it is estimated the total cost of this support will be about £1.3m plus VAT. Meanwhile, Greene King chief executive Nick Mackenzie will feature in the latest of Propel's videos with sector leaders on “navigating the coronavirus” crisis, which will be released tomorrow (Friday, 22 May). 

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