We British have a proprietary fondness for the pub. They remain a part of our cultural identity after over 1,000 years, they are some mythological representation of us as a nation to the outside world.
There’s an abundance of pictures on Facebook or Instagram of overseas visitors to York enjoying the hospitality of a hostelry. Pubs are the focal point of a village; a meeting point in every TV soap; at the heart of our communities.
Yet we don’t use them nearly enough. Supposedly…
Eighteen pubs a week are shutting – that’s not in dispute. The reasons are more complex. Some of it is the plethora of costs associated with operating a public house but as important is the way in which they’re run.
Which brings me to the curious and saddening news that the charismatic landlord John Pybus, who’s made the Blue Bell such a success, is facing an uncertain future.
He has been served a Section 25 notice by the pub’s owners to end his tenancy and force him to leave his business and his home.
Gave it a new lease of life
The Grade II* Listed Blue Bell on Fossgate has a national reputation due to its unspoilt exquisite unaltered 1903 Edwardian interior. It’s York’s smallest public house that has been serving beer since 1798 and is also the birthplace of York City FC.
It’s much vaunted diminutive drinking space is also a disadvantage and severely restricts the possible turnover. That hasn’t stopped John Pybus, only the 4th licensee in over 100 years, from packing seven real ales on the bar and giving it a new lease of life.
It fits well into Fossgate, which itself has become an epicurean hotspot with panoply of decent restaurants and smart bars and John has been a hard working member of the Fossgate Traders Association who have spearheaded the local renaissance and also organise the hugely successful Fossgate Festivals.
So what infraction had he committed to result in Punch Taverns issuing a Section 25 Notice – to end his tenancy and retake possession of the pub? In short: nothing.
He’s become collateral damage of a widespread strategy by the UK’s largest pub companies (pubcos) to resist and indeed to legally circumvent new pub laws that were introduced to try and make the industry more equitable.
John is a tenant of Punch Taverns. That means under the terms of his present agreement he pays them rent and also has to purchase all his beer from them. He keeps whatever profit he makes from his hard work and retail sales.
There’s a sting in the tail though. In line with other pubcos Punch have a punitive pricing policy when it comes to their beer. Not content with making a healthy profit and leaving something in the pot for their supposed business partners, they apply up to 100% mark-up to beer they purchase at highly competitive rates from breweries due to bulk ordering.
In York you can buy a nine gallon cask of beer from a pubco for £120 that would cost you just £65 on the open market.
So you have a tenant of a pubco having to compete toe to toe with a freehouse in the same neighbourhood having already paid twice as much for their beer. This kind of retail madness forces publicans to take a huge hit on profit margins to keep their beer prices competitive, which has a direct impact on the ability to earn an income proportional to their work and expertise.
This business model, which is replicated in thousands of other pubs across the UK, ensures that many tenants earn less than £15K a year for a 60 hour week. There can be nothing more dispiriting than knowing that however talented you are as a business person and however successful your pub, the majority of your profit is siphoned off by a sedentary business partner.
A new hope
So you’d imagine that there was a real sense of hope when in 2016 The Pubs Code was introduced in parliament to ensure that the 12,000 tied tenants of the UK’s six large pub companies were no worse off than the landlords of pubs that were not tied.
In short it gave pub tenants the chance for the first time to ask for a chance to negotiate a fair market rent (MRO) and opt out of the beer tie of having purchasing all their beer from the pubcos.
There’s theory and then there’s practice. The likes of Punch, EI, Marstons and Greene King aren’t going to go gently into that good night. They’ve greeted the Pubs Code with all the intransigence you’d expect from companies who jealously covet a cash cow.
Speaking with licensees from all over the UK I’ve learned of the bewildering catalogue of different tactics designed to frustrate tenants efforts to achieve a MRO agreement.
Pubcos are introducing all kinds of conditions not usually associated with a tenancy agreement in an effort to delay matters and are very aware that tenants don’t have the sort of deep pockets when it comes to protracted negotiations involving legal services.
Paul Crossman, who owns The Slip and The Volunteer Arms, had a very stressful experience when also dealing with Punch Taverns when negotiating a new agreement for the much loved Swan on Bishy Rd. He said:
John’s situation at the Blue Bell is sadly all too familiar. Indeed we faced exactly the same predicament when our lease at the Swan came up for renewal with Punch Taverns last year.
They issued a Section 25 notice at the earliest opportunity and we had no option but to adopt a bullish attitude and take the fight back to them on legal grounds.
It was extremely galling to be threatened with eviction by a company who had profited so vastly from our prior ten year tenure at the pub, but it is sadly standard practice at the moment.
We eventually secured a new lease after a very stressful and expensive battle. The Swan should at least now have a secure future for the next ten years.
It is tragic, and deeply unjust, that John may not have the same opportunity to safeguard the Blue Bell.
So John Pybus has suffered the ultimate sanction of the pubcos in avoiding MRO – a Section 25 Notice. Punch aren’t interested in a new tenancy agreement – they’ve terminated negotiations so they can replace John with a manager who will be salaried and a fixed cost.
This model is being replicated in hundreds of pubs across the UK by the likes of Punch and EI who are choosing to run all aspects of their pubs to circumvent the new Pubs Code.
People like John Pybus are left to pick up the pieces. All his hard work cultivating a great beer range; active social calendar and loyal customer base goes into the drip tray.
Punch opining about the importance of community spirit on their website rings a bit hollow. They’re probably not bothered – their manager will be a fixed cost on a balance sheet and they’ll look to maximise their profits.
Paul Crossman agrees:
The Blue Bell is a very special pub with exactly the type of real character that is so revered by pub lovers, but which means it needs dedicated stewardship under somebody who is heavily invested personally.
It will frankly never be the same again if it ends up under direct corporate management. The actions of Punch will therefore not only cost John heavily, but York itself, as yet another of its authentic, idiosyncratic gems will most likely be homogenised out of all recognition.
So what is being done to try and hold the pub companies to account and why are pub companies and industry bodies so keen to sweep it under the carpet?
Read my next article about the three maladies that cause pub closures and the big inconvenient truth.
Nick Love is a member of the British Guild of Beer Writers and an experienced pub campaigner. He’s a regular interviewee on all things pub related on local and national radio and TV and is York CAMRA’s Pub Protection Officer