Weekend press round-up, 13-14 April

Weekend Press 13 – 14 April Financial results and company news 3Sixty restaurants on the block Weeks after selling out of Giraffe, Luke Johnson is preparing to put the sale of another of his dining businesses on the menu. Advisers have been hired to explore a sale of 3Sixty Restaurants, which is chaired by Johnson and counts him as a large investor, after receiving an unsolicited takeover approach. The business owns two chains — Rocket pizzeria and cocktail bars, and Ego, which serves Mediterranean cuisine. It operates 12 outlets in total generating sales of almost £13m. Any deal is likely to value the business at more than £8m. The company is run by chief executive James Horler, who also owns a significant stake. He and Johnson bought out former backer LDC, the private equity arm of Lloyds Bank, three years ago. The pair recouped some of their investment last autumn when they sold Rocket’s Mayfair branch. They have hired Coffer Corporate Leisure to work on the possible sale. Johnson is one of the most prolific investors in the restaurant industry. Some of his involvement, such as with Giraffe, is handled through Risk Capital, the buyout firm. Other deals, such as 3Sixty, are made personally. Horler has spent his entire career in the hospitality industry. He previously ran the Frankie & Benny’s and La Tasca restaurant chains. The Sunday Times Bidders pull up at Little Chef The owners of Little Chef are cooking up a sale of the roadside dining chain. R Capital, the turnaround outfit that saved the motorway restaurant business from collapse six years ago, has put it on the market. City sources believe Little Chef, known for its “Fat Charlie” mascot, could fetch tens of millions of pounds thanks to a successful but savage restructuring. It is expected to attract interest from service station operators such as Welcome Break and Moto as well as coffee chains, such as Costa and Starbucks, looking to expand their presence in big roadside service areas. KPMG has been hired to find a buyer. R Capital bought Little Chef out of administration in 2007, saving nearly 200 restaurants. It had collapsed with huge losses. Celebrity chef Heston Blumenthal was hired to help revamp the menu as part of a Channel 4 documentary, and then later as an adviser to R Capital. The food had remained virtually the same for decades. After a long battle to revive the business — hindered by expensive long leases — R Capital offloaded nearly 70 of the worst-performing Little Chef sites. Today there is a core estate of 80, all of which are thought to be profitable. Little Chef has been serving food at Britain’s roadsides for more than 50 years. The first site opened in Reading in 1958. The Sunday Times Côte shines in Sunday Times Profit Track 100 Reatsurant operator Côte posted three-year average profit growth of 148.1% to come fourth in the Sunday Times Profit Track 100 league table, which ranks Britain’s private companies by fastest-growing profits. Each week 75,000 diners sit down to eat at a Côte Restaurant, whose menu is filled with French brasserie-style dishes. The company now has 38 venues, mainly in London and the home counties. Côte started life in 2007 in Wimbledon, south London, launched by five of the founders of the Strada restaurant chain. It is now run by joint managing directors Alex Scrimgeour, 41, and Harald Samuelsson, 44. Majority shareholder Richard Caring is reported to be considering a sale of the chain, which employs 1,124 staff. Profits reached £8.4m in 2012. Pub chain Amber Taverns was ranked 56th with profit growth of 60.5%, and Pret A Manger was 85th with profit growth of 47.6%. Thatchers Cider was named as “one to recognise”. The Sunday Times Rank makes offer to open bingo clubs Rank Group will issue a commitment to the Treasury today to open new Mecca Bingo clubs for the first time in many years and create new jobs in return for a cut in duty from 20% to 15%. In a document outlining its views on regulatory reform in the gaming industry, Rank disputes the Treasury’s assertion that cutting duty would reduce tax receipts, arguing that the resultant investment and prize increases would boost revenues by £35m in the first four years. The group, which also runs the Grosvenor Casinos chain, said that a cut in duty to 15% of revenues would “bring bingo into line with the majority of betting and gaming taxes in Britain, including online and mobile bingo”. Ian Burke, the Rank chief executive, said that Mecca, the second biggest operator behind Gala Bingo, had seen its estate fall from a peak of 122 clubs before the smoking ban to 97, of which ten made little or no profit. “It gets harder and harder to make them return to profit,” he said. He admitted that the group’s calls for a cut in bingo duty, together with changes to gaming machine and casino development rules, was not new. “But with governments changing every five years and the average junior minister having a life of two years, it is worth reminding people of the issues. In my seven years at Rank I think there have been eight economic secretaries to the Treasury.” The document, to be delivered today to about 200 government ministers, officials and MPs, provides a commitment from Rank to provide the Treasury with the economic models used by its advisers to work out its forecasts, but calls on the Treasury itself to be equally transparent in a bid to make such forecasts more robust. Mr Burke said that the overriding message from the document, entitled GamePlan, was that, with help from government, the industry could make a greater contribution to Britain’s growth aspirations while providing more people with an opportunity to “have a bit of fun and excitement”. He added: “This is not just about us asking for something for us, but about the wider economic and society benefits.” The Times Back to the future for Easterbrook It was a case of back to the future for Steve Easterbrook yesterday as the former head of McDonald’s UK announced he was quitting as chief executive of Wagamama after less than a year to return to the burger behemoth. His surprise appointment as executive vice-president and global chief brand officer, based at the group’s headquarters in Oak Brook, Illinois, sparked speculation that the product of Watford Grammar School was being groomed to succeed Don Thompson as group chief executive one day. Mr Easterbrook, who trained as an accountant with PwC, is returning to the same job that he briefly held in 2010 after four years leading a successful turnaround of its UK business, although this time he will report directly to the chief executive. His previous stint as chief brand officer lasted only three months before he was asked to return across the Atlantic to become president of McDonald’s Europe. Only nine months later, the Durham University graduate brought his 18-year career with McDonald’s to an apparent end when he quit to become chief executive of Gondola Group’s PizzaExpress chain. Only 11 months later he was on his way again, this time to run Wagamama. By coincidence, Gondola announced the appointment of a successor at PizzaExpress yesterday. Richard Hodgson was most recently group commercial director of Wm Morrison and before that he was at Waitrose. The Times A chip off the old Blanc Could Chez Gérard be poised to make a comeback courtesy of Raymond Blanc? The steak frites chain became hugely popular in the 1980s and 1990s, particularly with city types on expense accounts, but eventually lost its way. It didn’t help when its parent company collapsed. All but one of the Chez Gérard sites disappeared after being snapped up by rivals. The surviving branch, near London’s Liverpool Street station, is run as a bit of research and development by the chef’s Brasserie Blanc chain. It’s doing well enough that the new owner is thinking of opening more: “We see the opportunity for reviving the brand in the future.” Bonne chance. The Sunday Times Jurys Inn completes restructuring Debt-ridden UK hotel chain Jurys Inn has completed its restructuring after private equity backers pumped £120m of equity into the business in an effort to cut its debt. The cash injection brought down the hotel chain’s net debt to about £500m. Jurys Inn’s lenders – which include IBRC, Ulster Bank and AIB – have also agreed to a haircut of about 50% of this figure, taking total net debt to £250m, according to those familiar with the deal. John Brennan, chief executive of the chain, which has 32 hotels across the UK, Ireland and the Czech Republic, said: “Today’s announcement is great news for all our employees, customers and suppliers and is a very strong vote of confidence in our business.” Jurys Inn’s debt-induced travails were common in the sector, which allowed itself to become highly leveraged in the 2000s. Deloitte estimated this year that total debt for the hotel sector outside London was between £13bn and £16bn. Existing shareholders Oman Investment Fund and Avestus Capital Partners both took part in the restructuring, along with new investors Capital Management, another private equity group. Mr Brennan added: “By choosing to take a stake in the future success of the business, [our PE backers] have recognised the value of our business and management team, which has been reflected in our strong operating performance over the past three years.” While heavy interest payments ensured that Jurys Inn reported a large pre-tax loss for 2011, revenues for the period rose 65 year on year to £147.5m, according to the company. Earnings before interest, tax, depreciation and amortisation rose 4% to £33.4m. The Weekend FT Greggs is taking the Pas-ty Greggs has slapped loyal customers in the face by shrinking its pasties — and putting up prices. Its steak bakes, bacon rolls, and even its doughnuts have also been hit. The Sun is fighting back by relaunching our “Save our Savouries” campaign — a year after helping Greggs dodge a VAT raid on its best-selling snacks. Then we teamed up with Greggs to march on Downing Street with a petition. It demanded Chancellor George Osborne — a pasty muncher himself — ditch a plan for a 20% hike on the popular treats. Now we are pleading with Greggs to restore its tasty pastries to full size. Under the baker’s changes, pasties have shrunk five per cent from 190g to 180g, with the protein content — the meat — falling 14%. The breakfast bacon roll is 18% smaller. And industry bible The Grocer reveals the protein content of the steak bake is down 15% — at a time Greggs is claiming the product has been relaunched with “even more delicious prime steak”. Yesterday Greggs admitted there had been “very minor” increases in price. A spokesman tried to explain away the shrinking products by saying such changes were typically down to “improvements to specification” such as cutting salt. He added: “We are constantly reviewing our products and making changes and improvements to them.” Greggs put the new nutritional information on its website on March 15, just after ex-chief exec Ken McMeikan stepped down. He was unavailable for comment yesterday. James Halliwell, The Grocer’s savouries guru, said Greggs’ move would stun the nation. He said: “If you are going to promise more ‘delicious prime steak’ in your Steak Bake, shrinking the protein content by 15% is a funny way of going about it.” The Sun The Independent The Times The economy and taxation Osborne’s 1p off pint brings cheer to pubs In pubs across the UK, landlords are making a noise about the fact that beer has just got cheaper. In his Budget in March, George Osborne announced duty would come down by a penny. Whisky producers and winemakers sulked, brewers cheered and customers wondered if they would see “prices at the pumps” come down. Come April, the cut has come into effect, and the British Beer and Pub Association says the vast majority of its members have opted to pass on the 1p reduction, with many reducing prices at the bar. “If we’re not seen to pass this on – and not demonstrate that we’re grateful to the chancellor – we’ll never get any help in future,” says Brigid Simmonds, chief executive of the BBPA, which with 43,000 members, represents 95 per cent of the pub market. One Dorset brewer has introduced a novel way of passing on the chancellor’s largesse. At Hall & Woodhouse pubs across the southwest of England, prices remain unchanged but customers are invited to take a penny from a pot on the bar for every pint they buy. A note pinned above the bars of its 60 managed pubs says “Thank you George”. Anthony Woodhouse, managing director and part of the seventh generation of his family to run the company, says: “Some of the tourists thought it was a pot for tips.” The last time the duty was cut was 40 years ago, Ms Simmonds says, with the result that the UK has one of the highest beer taxes in the world. Camra, the Campaign for Real Ale, estimates the “beer duty escalator”, introduced by the Labour government in 2008 at the start of the financial crisis, has raised taxes by 42% in 4 years. Mr Woodhouse says Hall & Woodhouse pays about £35m on turnover of just under £100m. This is 20 times more than the family shareholders take in dividends and 50% more than the amount paid in staff salaries. “If we’re absolutely honest, when chancellors in the past have put the duty up by a penny we have always added our margin. So we thought when that process was in reverse we should reflect that,” says Keith Bott, managing director of the Titanic Brewery, which owns 7 pubs in Stoke-on-Trent. He has cut bar prices, not by 1p, but by 5p. Like most pub owners, he introduced the change from April 1, soon after the Budget. He says he could have held on until he had cleared the old stock. “But then people might not have made the connection with the budget. Anything that highlights the chancellor’s decision is good,” he says Bill Alingham, owner of the Steamin’ Billy Brewery in Leicestershire also reduced bar prices by 5p a pint. “The reduction is overdue. We do need to provide the working man with a value pint. But I don’t think the Tories and George Osborne will get much credit for the move.” At the Brewers’ Wharf, a Marston’s pub on the Dudley canal in the Black Country, the barmaid was more concerned by the confusion the change would create for her elderly customers. “We’re all going to need a lot more pennies,” she says pointing to the price list, where a local bitter was selling for £2.19 and a branded lager for £3.34. The Weekend FT Sport and entertainment TV price war looms as BT, BSkyB talks fail Key talks between BT and BSkyB over sharing Premier League football matches have stalled, meaning subscribers who want access to all top-division games will have to pay for a BT Sport package on top of their Sky Sports subscription. BT had discussed wholesaling sports rights to BSkyB so that sports fans who already had a subscription to the satellite broadcaster would be able to get BT’s sports content as well, with no additional charge. However, the companies could not agree on the terms and a price war now looks likely. Although they are notionally still in discussions, insiders claim there is almost no hope of a deal at this stage. “Whilst the door isn’t shut, no progress has been made on that point,” said a source with knowledge of the situation. “A deal looks very unlikely.” The news comes after a week of rows between the media and telecom giants over sports rights and advertising. BSkyB described BT as a “£22bn gorilla in puppy’s clothing” in response to BT’s claim that it was like a small dog against the BSkyB “rottweiler”. BT sources claim it was willing to share its content with BSkyB, but that BSkyB was not willing to make it a two-way deal, handing BT some of its premium sports rights in return. “Sky has refused to provide its content to others for many years now and so they have 'form’ when it comes to this issue. They are about as open to sharing as Ronaldo is to passing the ball when the goal is in sight,” a BT spokesman said. However, BSkyB claims that BT is the one that is refusing to share content. “We are very open to entering into mutual supply arrangements for next season. The key principle here is reciprocity of supply of Premier League content so that both of us can offer customers all the live matches in time for the start of the season,” a spokesman said. Without a content-sharing agreement in place, BT and BSkyB are expected to enter a price war in order to grab market share. Sports fans who already have a BSkyB subscription will be able to watch BT’s sports channels using their Sky box, but will have to pay an additional fee. BT has kept its prices for its new sports service under wraps, but is expected to unveil them next month alongside full details of the new television package. The service is set for launch before the new football season starts in August. The biggest battle over price could be reserved for pubs, which pay much larger fees than ordinary customers. The charge depends on the size and location of the pub, but establishments typically have to hand over a few hundred pounds a month. Many pubs which paid for BSkyB’s sports channels have cancelled their subscriptions due to expense. BT plans to offer those pubs a cut-price alternative, accessible over their old BSkyB set-top boxes. If pubs do not have the equipment, BT will hand them a set-top box and a satellite dish free. The Sunday Telegraph Food and drink Withdrawn meatballs back on sale Beef products found to have been contaminated with horsemeat are to be relabelled and put back on sale in British stores, The Independent on Sunday can reveal. The Swedish retailer Ikea has become the first to confirm plans to return withdrawn items to the human food chain, three months after watchdogs discovered horse DNA in a series of "beef" products sold in shops and restaurants throughout Europe. Batches of Ikea's signature meatballs could now return to its shelves and in-store restaurants within days, relabelled to warn of the true contents and probably at a reduced price. Details of the proposals emerged after the Government gave the green light to supermarkets and suppliers to put their frozen contaminated products back on sale, rather than throwing them away. Lord De Mauley, a minister in the Department for Environment, Food and Rural Affairs, said "it would be preferable to avoid wasting the products". He added: "The decision to relabel, redistribute or dispose of a mislabelled product lies with the business concerned." An Ikea spokesman said last night that the company was working on "a sustainable solution" for its meatballs, which are stored frozen in its warehouses. He added: "There is no health risk associated with eating the meatballs, so we would like to sell them relabelled and at reduced price and donate the money to charity." The Independent on Sunday Supermarkets end ban on Frankenfeed for chickens Marks & Spencer, Sainsbury’s and the Co-op yesterday ended bans on giving ‘Frankenstein Feed’ to farm animals producing meat, milk and eggs. The three retailers were the last of the big food chains to be holding out against the use of controversial GM crops on their farms. The change means that the vast majority of meat, milk and eggs sold by Britain’s supermarkets will come from animals raised on a GM diet. Alarmingly, none of these products will be labelled as coming from GM-fed animals in what critics call a disaster for consumer choice. GM crop farming has been shown to harm bees, butterflies and other insects in UK trials and on farms across the US, where many have become blighted with superweeds. In 2011, a team of doctors in Canada found that toxins implanted into GM food crops to kill pests were reaching the bloodstreams of women and unborn babies. Yesterday the Mail revealed that Tesco is ending its ban on the use of GM soya for chickens producing meat and eggs. Along with most other retailers, Tesco already allows GM feed to be given to other farm animals. The stores claim the reason for the U-turn is not a sudden conversion to GM, but rather they and farmers are finding it increasingly difficult to find supplies that are non-GM. Biotech firms such as Monsanto have ensured that 80% of the soya grown in the US and Brazil is genetically modified. For shoppers who refuse to buy meat, milk and eggs from animals fed on GM, the stores will offer organic alternatives. Sainsbury’s has also promised that food for its premium Taste the Difference range will continue to come from animals not fed on GM. A spokesman for Sainsbury’s said: “It has become increasingly difficult to source guaranteed non-GM feed in the short term. So from this Monday the fresh chicken sold in our By Sainsbury’s and Basics ranges will be from birds that have been given feed which we cannot guarantee to be GM-free.” This same policy will come into effect for chickens producing eggs for the chain from May. M&S is dropping a total ban on the use of GM soya and corn to feed chickens for meat and eggs, cows producing milk and beef, and pigs. It said: “This change is absolutely necessary because there is now a much reduced supply of non-GM feed available to UK farmers.” The Daily Mail The Michelin stars come out for a small town A decades-old rivalry lies behind an extraordinary cluster of Michelin-starred restaurants buried deep among the pine trees in a tiny community of Germany’s Black Forest region. The duel between two hotels determined to outdo each other has produced two three-star restaurants — as many as London — in the 15,800-strong town of Baiersbronn. First to win the coveted three stars was Harald Wohlfahrt at the Schwarzwaldstube, an 11-table restaurant at the Hotel Traube Tonbach. His achievement spurred on the rival hotel, the Bareiss, where the chef Claus-Peter Lumpp picked up his third star in 2008 for his eight-table restaurant. Not only have the two grand hotels in this quiet corner of southwest Germany retained their stars in tough annual reassessments, their culinary competitiveness has brought many more Michelin accolades. Both have now been awarded the organisation’s “Bib Gourmand” for their lower-cost restaurants, a mark of approval for places where diners can eat for a maximum €35 (£30) per head compared with €198 for the full tasting menu at the Bareiss. The competition has also created a regional hotspot. Baiersbronn boasts a one-star upstart tipped for greater things in next year’s Michelin awards while a two-star restaurant is just half-an-hour’s drive away at the Hotel Dollenberg in Bad Peterstal-Griesbach, a village with a population of 2,700. An academy-style training programme run by the two big hotels has spawned a succession of award-winning young chefs. Five of Germany’s nine other three-star chefs trained under Wohlfahrt at the Schwarzwaldstube. “It is a really exceptional concentration of stars,” said Nina Grigoleit, spokeswoman for Michelin Guides in Germany. Germany now has ten three-starred rated restaurants, the second highest number in Europe after France with 26. “The southwest of Germany close to the French border is the cradle of German fine cooking,” said Ms Grigoleit. “Due to the proximity to the French border, people were more aware of fine dining and also the chefs could go just across the border to Strasbourg and get their ingredients.” The Times The descriptions of wine that get up our nose From a "nervy" red to a white boasting a subtle hint of "spring hedgerows", if you have ever been baffled by the descriptions given to wines then don't worry, you are not alone. New research has revealed widespread bewilderment at the terms used by producers, retailers and critics to convey a bottle's taste. More than half of wine drinkers who took part in the survey (55%) said the descriptions given to wines failed to help them get an understanding of the flavour. And the drinkers were also able to pick out those terms they found most mystifying. They were given a list of 43 words and phrases used to describe different wines and were asked to identify the five they found most and least helpful in conveying the drink's taste. Those found most confusing were the phrases "firm skeleton" (designated least useful by 37%), "old bones" (35%), "nervy" (31%) "wet stone" (27%), "tongue spanking" (21%) "haunting" (21%), "spring hedgerows" (19%) and "brooding" (18%). Other terms found puzzling included: "vegetal", "leathery", "chunky", "canny" and "minerality". The most helpful terms were "fresh" (considered useful by 47%), "zesty" (43%) and "peachy" (31%). All the terms used in the survey were taken from the bottles or websites of leading wine brands, or recent reviews by leading wine critics. The survey of 1,000 wine drinkers by polling firm, One Poll, found that in total, more than half of respondents (55%) said that descriptions failed to help them understand the taste. When questioned further, only a third (33.7%) said they were helpful, while almost half (45%) said they found them "pompous". Nearly two thirds of respondents also said they never get the same smells from wine as those which are suggested from the wine label. The research was carried out for Laithwaite's Wine, an online retailer, although its own customers were excluded from the survey. Justin Howard-Sneyd, consultant for the firm and a master of wine, said: "Describing wine is not an exact science; wine and taste are very personal, very subjective things. A wine that I think tastes of cherry, could taste totally different to someone else, so it's no wonder that there is such a vast variety of language when it comes to wine descriptions. "We have probably been guilty ourselves of using overblown language in the past but this is a wake-up call to the whole wine industry to make a change." The Sunday Telegraph And finally… Man versus breakfast challenge none can beat There’s the big breakfast and then there is the Castle Café Challenger. The restaurant in Rochdale, Lancashire, was inspired to create the 6,000-calorie dish after watching the television show Man Versus Food, in which the host takes on eating challenges across America. The full English version contains 12 bacon rashers, 12 sausages, six black pudding, beans, chips, tomatoes, bread and butter, eight eggs, an omelette, four hash browns and four portions of spam. It costs £15 but anyone who eats it all in under an hour gets it for free. Joan Briscoe, 64, a waitress at the café said “many had tried and failed”, adding: “We had four students from Manchester come to take it on but even they couldn’t do it.” The Times