Propel Morning Briefing Mast Head CPL Learning Link Paul's Twitter Link Hive Pubs by Greene King Banner
Morning Briefing Strap Line
Fri 2nd Mar 2012 - The £100 million fraud on JD Wetherspoon

Story of the Day

Property fraud may have cost JD Wetherspoon £100m: The cost of the property fraud perpetrated on JD Wetherspoon by former property agent Van de Berg has been put at between £50m and £100m by company founder Tim Martin. The company won another legal action this week involving five freeholds that were diverted to a third party by Van De Berg, which earned £15m from JD Wetherspoon in the period it was seeking new property for the company. Martin told Morning Briefing: “It was quite a big fraud. If you add together the excess rent we’ve paid over interest we would have paid if we had acquired the freeholds - and add the value of those freeholds now, it’s probably between £50m and £100m. We really are talking about quite a big heist by Van de Berg.” Morning Briefing understands there are two more legal actions in relation to the Van de Berg case, which was originally decided in Wetherspoon’s favour in 2009. The two other pending cases are expected to reach the High Court within 18 months. Legal action against Van de Berg began in March 2005, which means the various legal cases arising will have taken eight years to pursue to their conclusion. So far, Wetherspoon has recovered a seven figure sum but has spent around £3m in legal costs – much of it spent hiring a legal team to comb through every document attached to property transactions between around 1992 and 2005. Martin added: “This is partly about making sure people understand we will take legal action if we are defrauded by unscrupulous people in the property market. It has good educational value for people setting up property businesses that rules apply. To my mind, the property market is more open to abuse than the stock market.” Martin also believes that the fraud it suffered had a detrimental effect on the entire high street property market. Legal action has revolved around 18 pubs where the company was denied the chance to buy the freehold and ended up paying extra rent after the freehold was diverted. But Martin believes that another 30 pubs were involved. He argues that the ramped-up rents his company paid as a result of the fraud were often used as precedents in rent-setting, which meant other high street operators were having to pay rents above the real market rates.

Friday Opinions:

Subjects: M&B takeaways, marketing, taxes and pub perceptions
Authors: Paul Charity, Ann Elliott, John Hutson and Kate Nicholls

A tale of two takeaways by Paul Charity: Both of the main mid-market brands at Mitchells & Butlers – Toby Carvery and Harvester – have now started serving takeaway meals from each and every site. It’s an entirely sensible development given how big the take-home market is. Until now it’s been dominated by Asian and quick-service operators with pub companies not even competing. Now M&B has decided to drive hard into this sizeable market. The company has gone from a small trial to a full-blown estate offer in about a year. Early trading at Harvester has been promising on the takeaway front with meals served quickly climbing to 10,000 a week – a less-than-shabby estimated incremental sales boost worth £60,000-a-week or £3m a year. Family dining cousin Toby Carvery followed suit last month with a full-blown estate-wide offer. Both brands are firm family favourites in the Charity household and so it was I set about testing both takeaway offers in the past week. The consensus view was clear with Harvester voted a clear winner with some reservations over the takeaway at Toby. The main parts of the Harvester offer lend themselves pretty neatly to takeaway. At my local Haywards Heath branch two visits were painless. It helps that once you’ve placed your order there’s something to do – go and build a salad at the salad cart. Customers are provided with Tesco deli-style transparent containers to fill with salad. By the time the right amount of love and attention has been poured into this, there was little more than five minutes to wait until the half spit-roast chicken is delivered. M&B supplies sturdy brown bags for carrying your hot main and salad home. The main course is neatly packaged in an entirely adequate designed-up box. Arriving home, the salad was still chilled and appetising while the chicken remained piping hot. Surveying our kitchen post-tucker, family thumbs were turned upwards. We’ll be takeaway regulars, not least because it’s great value at £6.29 all-in. Over at Toby in Crawley, even at 5.10pm on a Sunday afternoon the carvery queue was daunting. It took 20 minutes to get to the deck – in a carvery queue, it’s a scientific fact that every minute you wait feels like five. At the deck, chef supplies a cardboard box into which he carves your meat and then customers load-up on the vegetables. It’s only a qualified success. The box is far too flimsy, impossible to fasten in one case - and won’t take an awful load of top up-gravy. By the time I got home, the contents of my boxes were a distance from what you’d call appetising. Still, staff report they’d knocked out eight or so on the Sunday I called in. And M&B only have to improve the sturdiness and heat retention qualities of their containers to get this one completely right. For now, you can see why the company went to full roll-out at Harvester first.
Paul Charity is managing director of Propel Info

Hospitality is the best marketing tool by Ann Elliott: The Thatch at Adstock, as favoured by Nick Hewer from the Apprentice, is my favourite place to eat (and it isn’t a client) and I probably go there twice a month for dinner, sometimes even holding my team meetings there. I have just looked at the pub’s website and, whilst the design is attractive and the photos are appealing, much of the information is out-of-date and talks about events happening last year – even going as far back as the summer. I can sign up to the newsletter, of course, but as the last newsletter is so out-of-date, it’s hardly worth the bother. I might be put on a database and I might receive regular emails with offers but I doubt it. The owner hasn’t sent me one email since I started to visit his pub, not delivered one direct mail piece to my door nor sent me one single solitary text. He hasn’t given me one voucher for a free glass of wine, nor has he asked me to sign up for a loyalty card. I haven’t seen any local advertising for the pub or read one PR review. He hasn’t asked me to be his friend on Facebook, asked me to watch a video of his kitchen team on YouTube, nor tweeted me about his reaction to the England/ Wales rugby match last Saturday. Why should I make the effort to sign up for an out-of-date newsletter and give him my personal email address? Quite frankly it’s a marketing disaster. I have emailed him to tell him so and it will be interesting to see if he emails me back. And yet I took owner Andy a bottle of wine after Christmas as a present (yes, I know, coals to Newcastle and all that) because he makes me feel like he values my custom. He always comes over to say hello – if he hasn’t already met me at the door – he knows my name and the names of all of my family. His team do too. He offers genuine hospitality – not ‘The ten steps to great service’ put in practice by some of the chain operators which just skim the surface. He cares. He waits on tables and he clears them. He hears directly what his guests say. He isn’t hidden in a back office counting money or swanning around like he owns the place (which I think he does) doing nothing but irritating everyone. He isn’t particularly cheap (usually £70 for two with not a lot of drink) but his food is consistent, well presented, tasty and filling. It’s his hospitality, though, which makes him extraordinarily good value. I always leave his pub feeling better than when I went in and that’s not down to two pints of cider sat next to roaring log fire (although it helps). In contrast, I visited the Kings Arms in Berkhamstead last week and was so impressed by the price of the teas and coffees (£1 each) and the hospitality I received that I was prompted to visit its sister pub, The Akerman in Tring, a few days later. No welcome at the inn here. No smiles from the Maitre D’. No friendly banter (or even smiling) between the team members. In fact no hospitality at all (though the waitress was nice). I won’t go back in a hurry. If I were Andy, I would get my marketing right because the more people who experience his wonderful hospitality, the more successful he would be. But he has his priorities right. Hospitality is the very best marketing tool.
Ann Elliott is managing director of Elliott Marketing and Public Relations

Positive Intervention to save the British Pub by John Hutson: If the Government changes its attitude to taxation it can increase its revenues and help pubs. The smoking ban, a previous act of Government intervention, has proven to be a tipping point. It needn’t have been. Similar bans elsewhere, particularly the USA, were a catalyst for growth. But the perfect storm of a credit crunch, property crash, recession, and adding to an existing taxation burden for pubs has led to a torrid time since. Ten thousand or more pubs have closed, with the consequent loss of tens of thousands of jobs. Imagine the furore if ours were a manufacturing industry? Of course, the Government wasn’t responsible for the huge debts taken on by some operators, or for the silly rents that others signed up to in the ‘land grab’ of the 1990s. But we are where we are and thousands more pubs will close without its intervention now. Many thousands more jobs will be lost. Towns, villages and neighbourhoods are losing a vital part of their community and high street. Pubs are integral to UK society and, as part of a nation of shopkeepers, play an important role in providing jobs. They assist in managing alcohol consumption, a point often overlooked, but which Alistair Campbell and the BBC have recently recognised. Excise duty has risen almost 40 per cent in five years. It adversely affects pubs compared to supermarkets because alcohol forms a far greater proportion of their sales, and it is virtually impossible not to pass on to consumers. The huge increases in duty have greatly contributed to the widening gap in prices between pubs and supermarkets. Half of all beer is drunk at home, where it was once ten per cent. The ratio of jobs created in supermarkets to those lost in pubs is one to many. If duty were frozen for some years the industry could catch its breath. Thereafter it should be pegged to a maximum of inflation. Increasing duty might imply increased revenues for the Government, but this is not necessarily so. The loss of taxation revenues from the pubs that close has to be weighed in the balance. Even the humblest of pubs generates around £50,000 of taxes of one kind or another for the Government. The argument for reducing VAT to five per cent is compelling. Aside from the ‘fairness’ argument, that food sold in supermarkets attracts virtually no VAT and food in pubs, very often the same, is taxed at 20 per cent, the primary financial benefit of encouraging people to visit pubs to eat and drink, as a result of a reduced level of VAT (i.e. reduced selling prices to consumers), is that it will generate hundreds of thousands of new jobs. Jacques Borel, who is an expert in this field, and who has successfully campaigned all over Europe for VAT reductions, estimates around 300,000 jobs would be created in Year One. The fact that these jobs are likely to be amongst younger people is surely an added benefit. And it’s not fantasy. Governments across Europe have realised this, most recently France and Ireland, and have reduced VAT in pubs. The combined ‘cost’ of VAT and excise duty in pubs in the UK is around the highest in Europe. Lightening this burden will create jobs and income tax and reduce dependency on the welfare state. Since hardly any jobs have been created as a result of the shift in volumes from pubs to supermarkets, it is unlikely that many will be lost if things swing back the other way. Pubs are not perfect, but encouraging more people to meet in them, with their excellent levels of supervision from well-trained staff, combined with the mitigating effect of a mixed group of people, often dining, has to be preferable to sitting at home with extremely cheap alcohol. That such a change in taxation policy can increase Government revenues, save the good old British pub and help curb excessive consumption of alcohol, has to be worthwhile, surely?
John Hutson is chief executive of JD Wetherspoon

Changing perceptions of the pub by Kate Nicholls: There’s the popular saying that’s goes “if there’s something worth doing it's worth doing yourself”. It’s often borne out of a frustration to make a break through and change something for the better. That’s exactly what the ALMR Outlook Campaign, launched this week, is seeking to do by allowing all of us who work in the industry – and care about it - the opportunity to talk directly to those who govern our affairs in Westminster and Whitehall. It's about describing how what we do for a living makes a difference to the social and economic health of communities up and down the country. The aim (this time) will be to educate and inform politicians rather than bully and berate them. In doing so, we hope to change the terms of the political and media debate – away from, at times, a relentless focus on pub closures and 24-hour drinking and towards celebrating how dynamic and diverse our modern licensed hospitality businesses are and promoting our innovative, entrepreneurial side. So why is now a good time to tell our story? Because now, more than ever before, it is simply not credible or helpful for politicians and the media to ‘pigeon-hole’ what we do. The pub that caters for a particular clientele late night on the high street also serves a different clientele during the day. The urban, town centre pub restaurant - just as much as the village inn in its bucolic rural setting - attracts tourists, supports retail and sustains the high street. Food-led pubs are now the market leader in our sector and almost all pubs (87 per cent) serve food throughout the day. Increasingly they offer breakfast, coffee and a modern hospitality experience which attracts families, older people and their custom in the daytime and early evening. We meet a need for those people who want to pop in and out for a quick bite to eat or to socialise over a drink with friends and family while out shopping. On top of that, we are generating one in eight of all new jobs in the UK, particularly for young people, upskilling school leavers and creating exciting career paths for those who join us. These stories are to be found in every constituency up and down the country. But they are not being heard. Put simply, as an industry we are not good enough at publicising what is great about what we do. The Outlook Campaign website captures these stories for the first time and broadcasts them direct to opinion formers. Together they provide politicians with reasons to believe in our industry and invest political capital in us rather than treat us as an ailing patient with a chronic illness. If we succeed in telling our side of the story, then maybe, just maybe, we can start to rebalance the debate and ultimately encourage politicians to reassess the projected ten times increase in licensing fees we face over the next 12 months as a result of the measures contained in last year’s Police Reform Act; encourage them to reassess an out-of-date planning regime that does not allow for hybrid casual dining ventures that attract people to the high street; and reassess the value our businesses provide as responsible welcoming places to drink rather than the unsupervised environment at home where measures aren’t measured and consumption is fuelled by the easy availability and pocket money prices charged by the supermarkets. What have we got to lose? To join the campaign and tell us your story, log on to
Kate Nicholls is strategic affairs director of the ALMR

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Maliburu Banner
Hit Training Banner
OakNorth Banner
Contract Furniture Group Banner
Nutritics foodprint Banner
Douwe Egberts Barista Editions Banner
Hogs Back Banner
Heinz Banner
Estrella Banner
Knorr Banner
Camile Thai Banner
St Austell Brewery Banner
Sky Banner
Hungrrr Banner
Frobishers Banner
Peroni Banner
TipJar Banner
Airship – Toggle Banner
Cynergy Bank Banner
Zonal Banner
John Gaunt Banner
Libeo Banner
COREcruitment Banner
KAM Media Banner
Access Banner
Reputation Banner
Yapster Banner
Zonal Banner
Trail Banner
The Licensees Association Banner
Tiny Cloud Kitchens Banner
Harri Banner
Propel Banner
Hogs Back Banner