Are Rotherham's local pubs doomed? ONLINE POLL

LANDLORDS and licensees have been hit hard over the past 18 months by rising tax on alcohol, the smoking ban and a world-wide financial crisis .

With 52 pubs a week now ringing the last orders bell for the final time and a national call for a pubs revolution in a desperate attempt to bring down the cost of rents and beer for struggling publicans, Britain's traditional watering holes have never looked under more threat.

TOM SHARPE takes a look at the situation in two Rotherham locals and gets a taste of these tough times from those behind the bar and we are asking is the local pub doomed.

Click here to join our online poll and e-mail your comments.

ROTHERHAM publicans this week threatened to join a national boycott over the rent and beer prices being charged by two leading pub companies—but the move will come too late for one couple already on the brink of bankruptcy.

More than 150 South Yorkshire tenants of Enterprise Inns and Punch Taverns—which together own more than 15,000 UK pubs—are poised to withhold lease payments and buy their booze from other sources in rebellion against controversial beer tie contracts and crippling rents.

Protesters claim that under the beer tie agreements imposed by Punch and Enterprise, licensees are forced to stock drinks bought exclusively from their them, at prices up to 70 per cent more than the wholesale cost, meaning that many could fill their cellars cheaper from the local supermarket.

Visited by bailiffs

“Something has to be done because the pub trade is being run into the ground,” said Roger Davis, landlord at the Enterprise-owned Yellow Lion, Aston, and a member of the group known as the Sheffield Rebels.

“Around 52 pubs are being closed each month across the UK and it's largely because of these rents and beer tie contracts.

“I pay £267 for 22-gallon barrels, for example, but I know I could go and buy them wholesale for £107 if it wasn’t for my contract.

“Down south they have already got plans for a three-month boycott of rents and the beer ties in an attempt to change things and it’s only a matter of time before the same happens here.”

However, the action will probably come too late for Martin and Annette Wall, licensees at the Blue Bell, Aston.

The couple were visited by bailiffs at the weekend after struggling to meet the terms of their £5,000-a-month lease with Enterprise Inns.

Martin and Annette, who made a loss of £24,000 in the first six months of the year, claim that there is no way of making profit from the pub given their high rent and beer tie agreement.

Martin said: “If I don’t pay them the rent they don’t sell me any beer but if they don't sell beer I can’t pay the rent. It’s a stupid, vicious circle.”

Annette added: “I have had to buy beer from other sources and break the terms of my rent just so that we stand a chance of paying some of the money back to Enterprise...that’s how stupid it is.”

Martin (48) and Annette (51) believe they are around £15,000 in arrears with Enterprise and still have 20 years remaining on their lease.

While Annette works at the pub, Martin still works full-time as a commercial manager at a laser-cutting firm, near Pontefract.

Annette said: “The plan was for Martin to leave work after we got up and running with the pub but it’s certainly not worked out like that.

“Looking back, we were quite comfortable when we took over the pub but if we ever get out of this we'll have lost all our money and our home."

A spokesman for Enterprise Inns said: "We do not discuss private and confidential matters which may arise in the business relationships between the company and its licensees.”

Landlord's story: The worst mistake I ever made

A LANDLORD is celebrating after wrestling an idyllic country watering hole from the hands of a pub company he has branded “ruthless.”

A string of previous tenants at the Black Lion in Firbeck have been left staring bankruptcy in the face after battling to meet rents of up to £90,000 a year and honour contracts forcing them to buy alcohol at a high mark-up from the pub's owners, Punch Taverns.

But new landlord Phil Rogers was punching the air after returning the pub to private hands, securing outright ownership following a three-month battle to finalise a £500,000 deal with the firm.

Phil, former landlord of the Millstone, Tickhill, pulls no punches when talking about Punch Taverns and the role he believes they are playing in a failing pub trade.

“There is definitely money to be made in the pub business,”" he said. “The simple fact is that ruthless outfits like Punch Taverns and Enterprise Inns are strangling the life out of the trade.

“With their vast rents and the fact that their tenants have to buy their beer from them, at nearly twice the price, all they are creating is a legacy of bankrupt former publicans.  It’s a disgrace that they are able to get away with it.”

Publicans blamed

Earlier this month Giles Thorley, Punch Taverns’ chief executive, blamed publicans for the downturn of the pub trade at a time when 52 establishments are closing every week.

Mr Thorley made his comments as Punch released annual figures showing that falls in the value of its 7,700-strong pub estate had pushed it £406 million into the red and the pub industry waited to see whether the Office of Fair Trading would spark a Competition Commission investigation into the controversial beer tie.

Under the tie, licensees of tenanted pubs must buy their beer from the pub company for up to £170 per barrel above the wholesale price.

Technical measures are also taken to make sure that they do not sell beer bought from other sources.  Last week, however, the OFT concluded that supply ties do not contribute to higher prices or prevent pubs offering a wide choice to consumers.

But Phil is in no doubt of the effects of high rents and beer ties on those trying to make ends meet as tenants of Punch Taverns and Enterprise Inns.

“Ever since the Black Lion fell into the hands of Punch, people have struggled to keep it afloat,” he said.

“Landlords have been left penniless through little fault of their own.

“Lives have been ruined and it wasn't a good situation for the pub or the village, either. There's been no consistency.

“Now the Black Lion is back in private hands I'm confident that I can make a popular and thriving village pub.”

Before Phil moved into the Black Lion in July, the pub had seen a decade of upheaval which had left at least two tenants financially ruined.

When Barbara Bell moved to the Black Lion in 1999 she was newly married, had a comfortable home and owned three flats with sitting tenants. 

Two years later, her marriage had come to an end and she was broke.

Barbara said that an annual rent of almost £90,000 and beer prices that were “well over the odds” made success an impossibility, adding: “I’d tell anyone with aspirations to run a pub to walk away—it can end in disaster.”

Following Barbara into the pub was Mick Walker, an experienced manager of  pubs in Sheffield, who moved in with his wife and three children in the summer of 2004.

Mick was forced into a legal wrangle with Punch just 18 months later as he tried to escape his crippling ten-year lease, costing £57,000 a year.

Speaking about his time at the Black Lion, Mick admitted: “It was the worst mistake I have ever made.”

Pub company's response

A PUB company boss insisted this week that market pressures were putting landlords under immense pressure and claimed that the cost of leases and beer tie agreements were not to blame.

Punch Taverns’ regional operations manager, David Wigham, admitted this week that the firm had made money from their mark-up on beer prices, but said it had run its operations responsibly and supported its tenants.

He said: “In the current climate, more than ever, we have to do all we can to ensure that our partners (tenants) are able to operate a viable business and that's a responsibility we are taking very seriously.

“Our rents and beer prices are calculated in relation to the projected income of each individual pub, but in recent years the trade has been hit by the smoking ban and a rising tax on alcohol.”

Advice and training

Mr Wigham added: “Punch Taverns are careful to offer advice and training and request that people get their own legal advice before taking on a lease at one of our pubs.

“We want to make sure that we get the right people in our pubs. It is not in our interest to have tenants coming and going. We want to see our partners making money.

“Looking back, we understand that the way we conducted business might not have been as transparent as it could have been and we are now revising the way we operate.

“Our partners will be able to select a higher fixed rate of rent in return for cheaper beer prices if they choose, whatever works for them.

“We are operating in a time where sustainability is key and we will offer all the support we can to help our partners run a viable business.”