EI Group/Stonegate are still seeking rent on closed pubs & “support” is a cynical PR ruse

Following pressure from the grassroots tenants #NoPubNoRent campaign and a letter from 60 cross-party MPs, led by pro-pub MP for South Cambridgeshire, Anthony Browne, Stonegate Pubs, who bought the indebted Enterprise Inns (now rebranded as EI Group PLC) rushed out a press release giving the impression of support for tied tenants.

However as EI Group tenants have made clear, in reality EI Group are still charging rent on many of their pubs, despite being closed with no income. What’s more, the announcement actually confirms EI Group’s intention to ask their tenants to hand Government grants to them, for commercial rent on pubs that cannot trade.

What is being presented as ‘credit’ actually means that tied tenants will simply be given a slight discount from what are already hugely inflated ‘tied’ prices, as EI Group operate the controversial pubco tied model that allows them to charge their own pubs and tenants vastly more than brewery and genuine wholesale (not industry “wholesale”) prices for beer. This not credit in the normal sense at all.

As EI Group tied tenants have made clear, all they get in return are slightly less inflated (still well above market) tied prices when (indeed if) they are trading. Details of how this so-called “trade credit fund” will operate will be provided separately and could well show this ‘support’ to be even less meaningful that is already apparent. EI could easily simply offer modest reductions in the vastly inflated tied prices they charge so it takes months even up to a year to get this so-called support, which in reality is EI handing back the Government grants slowly and in a way that enables them to keep them as long as possible.

In addition, it’s been pointed out that EI Group would keep all the grant for any tenant who cannot survive the closure or ends the lease for any reason and with other pressures, it is likely that some tenants simply will not be able to continue.

The fact that this applies only to tied tenants also of course means that any tenant who has managed to exercise their right to a Market Rent Only (free of tie) lease is still expected to pay FULL rent which is discriminatory, which the Pubs Code is supposed to outlaw. The British Pub Confederation have written to the Pubs Code Adjudicator, Fiona Dickie, asking her to make a statement that this is unacceptable.

Greg Mulholland. Chair of the British Pub Confederation said:

“It’s great to see that pressure from tenants and from MPs has pushed EI Group and their owners Stonegate Pubs to move away from charging full rent on all their closed pubs and this will help some larger EI Group pubs, but the reality of their announcement is that it still leaves many EI tenants having to pay rent and the fact that EI Group still expect them to hand over Government grants, intended for pubs. This isn’t acceptable. 

“It’s very cynical to be offering so-called credit against the hugely inflated above-market tied prices EI charge to tenants, that isn’t real credit or real support, it’s a PR ruse. So we continue to call on EI Group and the other pubcos to do the right thing and stop charging commercial rent on pubs that are not able to trade. Anything less than this means tenants building up debts with no income and will lead to pub closures”.

The British Pub Confederation are supporters of the No Pub No Rent campaign and are asking everyone who loves and supports pubs to write to their own MP asking them to support pub tenants and asking the Pubs Code Adjudicator and Government to intervene and make clear that grants meant for pubs and publicans must not be siphoned by pubcos whose interests are very different from those of pubs and publicans.

You can download a letter to send to your MP here.

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