Constructive Meeting With Punch Taverns

Yesterday representatives from Save The Red Lion Campaign’s Steering Group met with Richard Tole (PunchTaverns, Senior Estates Development Manager), John Kinsey (Jones Lang laSalle, National Director) & Michael Easton (Jones Lang laSalle, Associate Director) to hold initial discussions about the sale of the Red Lion. Jones Lang laSalle is the estate agent that has been instructed to sell the Red Lion.

Some of the key points that arose out of our constructive discussions included -

Punch Taverns confirmed that the Red Lion is up for sale, not because it is not a viable business (despite what Punch Taverns have said publicly), but rather because, like many other of its pubs it has not delivered profits at an appropriate level that works for it.

Punch Taverns have currently taken the pub off the market to allow the Campaign the opportunity to put a financial package together. Punch Taverns confirmed that it did not take the pub off the market due to any actions taken by the Campaign, but solely for commercial reasons.

It was put to Punch Taverns that in effect the Campaign was the only likely purchaser given that there had been no realistic interest shown in the pub whilst it had been on the market.  Punch Taverns were urged to recognise this point & negotiate a realistic price for the pub with the Campaign

It was put to Punch Taverns that if it was to facilitate a straight forward sale to us at the right price then it could benefit from good local publicity, which could be commercially useful to it bearing in mind that it owns other pubs in the locality.

Discussions took place around how Punch Taverns could assist the Campaign in trying to attract potential a future tenant (if that was what it decided was to be its future management arrangements for the pub). Jones Lang laSalle also offered to assist the Campaign in developing its business plan or any other matter that would facilitate it fully understanding a future Red Lion business’s commercial costs.

By the end of the meeting Punch Taverns had sought to reassure the Campaign that it was willing to work with it to see if both parties could reach a point where an offer from the Campaign could be taken to its Board with a recommendation to conclude a deal.

The meeting concluded on a positive note with Punch Taverns assuring the Campaign that it would work with it to try to achieve a mutually agreed sale. To this end Punch Taverns offered to meet with Campaign representatives again at a date that was helpful to the Campaign.

The meeting was an extremely helpful one and the campaign looks forward to working with Punch Taverns to conclude a mutually agreeable outcome for the future of the Red Lion.

Off To Meet Punch Taverns

Campaign representatives are due to meet Punch Taverns & its local estate agent Jones Lang laSalle this lunchtime.

It will be interesting to see how they approach the discussions as they have come across somewhat lukewarm to the entreaties of the Campaign so far.

Campaign Creates Company To Buy Red Lion

In order to purchase the Red Lion pub the Campaign needs to establish a company which would own the property. On 14 September the Steering Group agreed to establish a limited company. The company, because it wants to be rooted in & representative of the community’s interests whilst being a commercial entity, will also be effectively a co-operative operating for the benefit of the community. The company will be registered under the Industrial & Provident Societies Act 1965.

At the Steering Group meeting on 5 October the Steering Group agreed the Rules for the company which are based on Model Rules promoted by the Campaign’s adviser the Plunkett Foundation. These Rules now have to be approved by the body that regulates Industrial & Provident Societies, the Financial Conduct Authority.

It is anticipated that the FCA will take up to 4 weeks to agree to register the company at which point it can start trading. The full details & the name of the company will be announced once the FCA has registered it. It would be this company that would the organisation which could potentially become the next owner of the Red Lion.

The establishment of the company will be yet another significant milestone in the Campaign’s attempts to purchase the pub.

If you think that you might be interested in investing in the future Red Lion business please complete & return the share interest form. It can be returned to any of the addresses on the form or to the Campaign email thepubinthevillage@gmail.com.

 The share interest form is available at -
http://sites.google.com/site/thepubinthevillage/SaveTheRedLionShareInterestForm.doc

or click the link on the right hand side of this blog’s home page.
http://sites.google.com/site/thepubinthevillage/SaveTheRedLionShareInterestForm.doc

Getting Punch Taverns To The Table

Save The Red Lion Campaign was expecting Punch Taverns to welcome the opportunity to deal reasonably & in good faith, particularly once it had secured the listing of the Red Lion as an Asset of Community Value. This listing meant that for 6 months from the date of the listing on 10 September no one else could purchase the pub whilst the Campaign was formal seeking to do the same.

However, immediately after the listing was declared the estate agents that Punch Taverns had instructed back in April to sell the pub informed the Campaign that no offers would be considered until 6 months & 1 day from the date of listing & that any bids would be best & final offers from anyone interested in purchasing the pub.

This effectively put two fingers up to the Campaign & gave the clear indication that it was not prepared to negotiate with the Campaign over the potential sale of the pub at any point whilst it was legally the only potential purchaser.

Why did Punch Taverns do this? Presumably the Campaign’s successful listing of the pub upset it. But why would this be? Presumably because by securing the listing it narrows the possible uses that the property can be put to for the next 5 years. Punch Taverns must believe that this reduces their opportunity to find a purchaser.

You would think that having had no one show any significant interest in the pub whilst it was on the market from April, that Punch Taverns would welcome the opportunity to discuss the possible sale of the pub to anyone, including the Campaign.

Well, it looks as if that might now happen. But not without having had to struggle to get Punch Taverns attention.

The estate agents were reluctant to put the Campaign in touch with Punch Taverns and so we pursued both Punch Taverns (and some of their senior Executives) & the estate agents on Twitter. We then issued a press release expressing dismay at Punch Taverns’ attitude to us. We even wrote directly to Punch Taverns’ Chief Operating Officer Neil Griffiths asking to meet with representatives of Punch Taverns.

By now we had Punch Taverns attention & within a couple of days we were trying to co-ordinate diaries to hold a meeting.

On 17 October representatives of the Campaign will now be meeting Punch Tavern’s Senior Estates Development Manager, as well as a Director & an Associate Director of the estate agents Jones Lang laSalle. This will be the first opportunity that the Campaign will have had to discuss the potential purchase of the pub.  Plus ca change!

Watch this space!

Today's Sidmouth Herald Campaign Article

On page 15 of today’s Sidmouth Herald, under the heading “Pickles backs Red Lion campaign”, it carries the story that Secretary of State Eric Pickles has given his backing to Save The Red Lion Campaign’s efforts to purchase the pub for the community.

The Herald’s article can be read at –

http://sites.google.com/site/thepubinthevillage/11.10.13SidmouthHeraldArticle.pdf

Campaign Uses Project Plan To Get Things Moving

The Campaign should know very soon if it has secured a £10,000 grant from the government to start the process of looking at the feasibility of creating a viable business plan & working out the costs associated with creating a successful venture out of the Red Lion.

The Campaign will be using this funding to undertake a range of necessary activities which will include –

o   surveying & valuing the Red Lion

o   obtaining upgrade designs & quotes

o   developing a viable business plan,

o   accessing capital grant funding & capital loans

o   preparing & launching a share prospectus

The Campaign Steering Group has an agreed Project Plan within which it has now established a number of Workstreams which will concentrate over the forthcoming months on the detailed work of pulling together a viable business for the future. Each Workstream has a specific Steering Group member who is responsible for driving forward the activities within each one.

The next few months will be a busy time for the Steering Group as it determinedly watches the clock that is ticking away whilst the campaign has the legal opportunity to seek to purchase the Red Lion without any other potential purchasers being able to do so

Greg Mulholland MP Takes Pubco Fight To Parliament

There is much criticism about how these pubcos operate often leading to tenants paying above market rents & customers paying inflated beer prices. Greg Mulholland wants to use the opportunity of having an Early Day Motion on the matter debated in Parliament to highlight the problems of pubcos.

The Early Day Motion that he has tabled for debate has the support of 152 MPs. This is a large number of MPs signing up to support an issue that an MP has highlighted for debate. The Early Day Motion, which is written in unique Parliamentary style is -

That this House welcomes the Fair Deal for Your Local campaign supported by the Federation of Small Businesses, Forum of Private Business, the Campaign for Real Ale, Guild of Master Victuallers, Fair Pint, Licensees Supporting Licensees, Pubs Advisory Service, Justice for Licensees and Licensees Unite calling for a fair deal for licensees tied to large pub companies; further welcomes the Government's commitment to introduce a statutory code of practice to enshrine principles of fair dealing and that tied licensees should not be worse off than free of tie licensees; notes that large companies take more than is fair or sustainable from pub profits in both inflated product prices and excessive rents, causing failure of pub businesses nationwide; believes that to deliver the Government's commitment the code must include an option for tied landlords of large companies to pay an independently assessed market rent only to their pub owning company and that this should be offered alongside tied agreements; further notes that this solution was put forward by the former Business and Enterprise Committee, and now by the Business, Innovation and Skills Committee, with unanimous cross-party support of Committee members; further believes that this would deliver a fair and positive business relationship between large pub companies and their licensees, resulting in a thriving pub sector which would boost the economy; supports the commitment to exclude family brewers by applying the code to companies that own more than 500 pubs; and urges the Government to implement this to secure a sustainable future for Britain's pubs.

This story about this is reported in today’s Publican’s Morning Advertiser -

http://www.morningadvertiser.co.uk/General-News/Greg-Mulholland-secures-Commons-debate-on-pubco-leased-model

The Red Lion pub that Save The Red Lion Campaign is seeking to retain & purchase for the community has been owned by a pubco – Punch Taverns – for a good few years now. You have to ask yourself have the customers benefited from their ownership? Are the beer prices competitive? Has there been any meaningful investment made in the property?

You know the answers to these questions only too well unfortunately! Look out for reports on Greg Mulholland’s Early Day Motion. It’s another step in the campaign to get them reformed.