PCA update on Support for Tied Pub Tenants in Relation to COVID-19

The PCA has released a statement to report on its ongoing engagement with the pub-owning businesses about how they are supporting tenants.

The PCA’s office states “It is imperative that pub-owning businesses do as much as they can to help their tied tenants. We have challenged each pub-owning business to show how it is being fair both in its approach to rent and in making arrangements for ensuring as far as possible that every tenant is able to return to trading and profitability after lockdown.“

Since the government implemented a complete lockdown, tenants have been calling on pub-owning businesses to offer support, not least in terms of the rental being charged on their pubs. A social media campaign fronted by Greg Mulholland, chair of the British Pub Confederation has been trending, calling on pub companies to cancel rents altogether.

Many of the tenants we have spoken with expressed concern that without rental concessions they may struggle to reopen.

Many pubs already are barely profitable, and the prospect of accruing debt is very alarming. To date, of the big six regulated pub companies, only Admiral Taverns initial offered to waive rents – and they have since announced that they will be charging some rent moving forward depending on the level of grants received by tenants.

The Publican’s Post understand that Star Pubs & Bars (Heineken UK) are offering rental concessions on a case-by-case basis, and Greene King have set up a relief fund. We are aware that this week Marston’s have written to tenants offering concessions also based on grants, and a case-by-case basis.

A Marston’s tenant we spoke with, who did not wish to be named, advised that she had been offered a 90% concession. Other tenants seem to have been offered 50% depending on their government grant.

We understand Punch are reviewing cases individually, and we are not aware of any Ei Group tenant having been offered any rental support. Currently Ei appear to be deferring rentals for the time being.

The Publican’s Post acknowledges this is a tough time for the whole industry, as pub-owning businesses have also lost their turnover. However, it is our opinion that it is in everyone’s best interests to work together and find solutions that ensure the long term viability of these businesses.

If the closures continues well into the latter half of this year, as seems likely, even the strongest businesses will not survive.

The PCA further state “It is imperative that pub-owning businesses do as much as they can to help their tied tenants. We have challenged each pub-owning business to show how it is being fair both in its approach to rent and in making arrangements for ensuring as far as possible that every tenant is able to return to trading and profitability after lockdown.“

We will be monitoring this situation with great interest.