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You could call it the unintended consequence of well-intentioned legislation, aka the road to hell. In the early 90s legislation was introduced to break the almost monopoly ownership of pubs by large breweries offering a bland range of beers. So the ownership ceiling was set at 2000, which meant that the breweries had to dispose of thousands of pubs very quickly to comply with the legislation.
It also meant that pub ownership companies had to be set up very quickly with little consideration for how their business model might work. Owning a pub was generally considered a licence to print money, so all should be fine. Shouldn't it?
Well, actually no, it hasn't.
If you own a pub without debt, then yea. Fill your boots with money, ching ching. But if you have a mortgage, which the pub owning companies did cos they had to buy the things and owed tens of millions, then you need a high revenue and you need to maintain it more or less forever. And, cos they were buying their beer from breweries and then selling it on to the landlord of the pubs, they weren't making profit on the brewing of beer, just the selling of it and they were adding a markup of anything up to £50 for a 9 gallon firkin (1/4 barrel), which meant that the pubs were uncompetitive with any other pub in the area and especially with supermarket beer.
So, the only other revenue the companies could manage was the selling off of the asset itself. And pubs are very lucrative pieces of real estate, some have large amounts of land, epsecially if they can have a change of use for planning permission to convert to homes. In London the pub, as a business, can be worth a fraction of the real estate value for property development. Eg one pub in W london, worth possibly £2 millin s a pub was sold for £27 million for development.
And so, companies are using every trick in the book to flog off their pubs for residential use.
The Brown Bear in Berwick was one such victim. Fortunately somebody who cares more for their local community than the profit has bought it. I think it's a great plan, but the issue is that you still need colossal amounts of money to buy a pub.
Which is why micropubs (pubs installed in shops premises) are psrining up everywhere. But that's another story
keep to the Fen Causeway
But there are many medium sized towns, and Berwick is a classic case, which have been hollowed out by migration of the younger generations and superstores on the fringes, leaving a wasteland of chain stores, charity shops, betting shops, estate agents and moribund pubs which pass from one set of hapless tenants to another.
Enterprise Inns flogged off the Brown Bear for next to nothing and it was snapped up by a very shrewd cash-rich local businessman who is estimated now to have well over 100 local properties.
Mark believes - and I agree - that he has identified a gap in the market for a genuine community pub proposition going way beyond the conventional.
He successfully turned around the Sun & Doves (which everyone apparently said was beyond help) and applied a formula which trebled the turnover - only to find that the landlord multiplied the rent, and eventually bankrupted him.
"The future is already here -- it's just not very evenly distributed"
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