Stonegate Pub Company unveils multi-million pound support package for Ei Group pubs
A multi-million pound support package has been announced by Stonegate Pub Company for pubs within its Ei Group - but landlords are warning it will be not be enough.
The package includes rent credits or trade credits, along with the cancellation of tie release fees and fixtures and fittings rentals.
But there are concerns that landlords in receipt of government grants to help them meet their living costs are being asked to use them towards remaining rent costs.
A cross-bench group of 60 MPs, co-led by South Cambridgeshire MP Anthony Browne, had warned in a letter to Ei Group that many pubs faced permanent closure unless the pub company took action, as the Cambridge Independent revealed.
Among the pubs owned by the company are the Three Horseshoes in Comberton, the Lion and Lamb in Milton, the Black Horse in Melbourn, the Plough in Coton and the White Horse in Swavesey.
Stonegate said its “fair balance of support and assistance” for leased and tenanted businesses within Ei Publication Partnerships includes:
- three-month rent credit for the period April to June for tied publicans operating on substantive agreements that are not in receipt of government grants;
- trade credits of either 75 per cent or 50 per cent of the value of three months’ rent for those publicans who are entitled to government grants of between £10,000 and £25,000, to enable them to restart their business with confidence and ease cash flow;
- cancellation of tie release fees and fixtures and fittings rentals for the same period regardless of a publican’s entitlement to grants.
May’s planned price rise on tied products delivered to pubs has also been postponed until further notice.
But one landlord told the Cambridge Independent the offer was not enough.
“We have high rent. Because we received the government grant, they want us to pay the rent with that. That won’t go far,” said the landlord.
“Then they’ve offered a trade credit once we’re open on beer - if we open again. We are paying exorbitant prices on beer anyway.
“There is a huge movement behind this under the #nopubnorent campaign.
“We have no income. We are not likely to open until the back end of this year.
“This grant is the only thing we’ve got to keep us going and for me to feed my kids. My rent debt is already in excess of half of that - and we’re only in May.”
Tory MP Mr Browne said: “I am glad that the Ei Group has listened to the concerns addressed in our letter and is willing to offer a three-month rent credit for the period April to June to some tied publicans. However, this still leaves many with significant overheads to address.
“The reaction from pubs in my constituency has been very mixed, and I will continue to work with them and fellow MPs in the hope of seeing as many pubs as possible reopening in the future.”
Stonegate, which is owned by London private equity firm TDR Capital, said its support plan followed “detailed analysis across a representative sample of pubs and consultation with publicans”.
Nick Light, managing director of Ei Publican Partnerships, said: “Our approach is founded on being both reasonable and transparent.
“The support packages we are providing ensure consistency, whilst remaining objective, as well as taking into account the government support grants of up to £25,000 which are now filtering through to businesses, which the Chancellor has stipulated are aimed at providing financial relief towards fixed costs, including rent.
“We are delighted to see that over 80 per cent of our publicans who qualify for a grant have now received this payment.
“It is vital to us that our pubs and our publicans are in a position to trade successfully when pubs are allowed to reopen.
“The rent support and trade credit initiatives are intended to provide our publicans with a strong platform to do so, and to help relieve some of the financial pressure required to restock and restart.”
The support was “within the spirit of the requirements of the Pubs Code Adjudicator”, the company added, and the analysis it carried out used the rateable value methodology applied in calculating government grants.
Pubs were told to close from March 21 under the initial lockdown. The timetable for them to reopen is not clear.
Stonegate said it was working with the trade associations for further clarity as well as campaigning for additional grant assistance from government to support any phased opening restrictions publicans may face.
Mr Light said: “It is crucial enough time is given to ensure supply chains are in a position to remove and replenish stock, staff are fully trained and all businesses that are permitted to open are compliant with safety requirements.”
In their letter to the company, dated May 6, the group of MPs had warned that failure to follow the likes of Adnams, Everards, Admiral Taverns, Timothy Taylor’s, Hall and Woodhouse, Robinson’s, Wadworth’s and Palmer’s Brewery in providing rent relief would put “tenants deep in debt, making it financially more difficult for them to reopen”.
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