On the back of the vote to introduce a market rent only option, Alistair Darby, chief executive at Mitchells & Butlers (M&B) has said that politicians have a poor record in terms of intervention in the sector.
He told M&C Report: “They have been helpful recently in terms of duty but that has made a nice change from years of unhelpful participation in this industry. I fear this is going to be another poor example unfortunately.”
3% of M&B’s estate is currently run on a franchise/tenanted agreement and Darby said the group already has very competitive terms in those pubs.
He said: “What impact it has on us if it gets passed into law will be very minor. My view, and I have run tenanted pub companies, I hoped this day wouldn’t come but I feared that it might. Speaking from my time at Marston’s we were preparing for a time when the tie was challenged.
“I am not convinced it is a good thing and I tend to buy the theory that as you create an ever growing property frame of mind in a tenanted pub company then by definition the levels of support and assistance and sympathy that gets applied to the person that is running that pub gets diminished. That must ultimately mean that more pubs are going to close.
“You start breaking down the tie, you start breaking the emotion and the ownership that comes with supplying beer and having a real interest in that business, by definition you are going get ever less interested in the fundamental performance of that pub and ever more in ‘just pay up the rent please’.”
