Applying For A Tenancy Ornew Lease
Breweries And Pub CompaniesOver the last 15 years the licensed trade has gone through many changes, mainly as a result of the Monopolies and Mergers Commission investigation into its activities, and subsequent legislation –
The Supply of Beer (Loan Ties, Licensed Premises and Wholesale Prices) Order 1989 and
The Supply of Beer (Tied Estate) Order 1989. The Monopolies Commission had concluded that the major brewers of the time had a stranglehold over the industry and as a result consumer choice was severely limited, and independent producers and wholesalers were unable to compete. The Government issued the ‘beer orders’ which required brewers with over 2000 pubs, to release from the tie half of the surplus over 2000 pubs, creating 11,000 more free houses. The national brewers were required to allow their licensees freedom to purchase non-beer drinks from any source and sell at least one cask beer. The result has been a complete shake-up of the industry, with several brewers selling their pubs to focus on other activities, and mergers between brewers. Of the original major brewers, only Scottish and Newcastle currently have a significant pub estate remaining. In response to the new shape of the industry and more appropriate legislation to cover the situation, the beer orders were revoked in 2003.
The changes have led to the growth of pub company businesses, who now dominate the industry. Many own large numbers of pubs. In 2005, the top 3 pub companies owned one third of total UK pubs. These operators have steadily increased their pub estates through acquisition over recent years and this trend is likely to continue.
How Pub Vacancies Are Filled
When a tenant hands in their notice or their agreement expires, it is the responsibility of the Business Development Manager/Area Manager to find a new tenant or lessee for the pub. The tenancy and lease recruitment department will be notified of the vacancy, and will prepare ‘pub particulars’, similar to an estate agent’s house sale particulars. These will normally give details of estimated ingoing capital required, trading information, and sometimes, annual rent. Details are sent to enquirers and will also be circulated to people who are registered with the brewery or pub company. This information may be displayed on the brewery or pub company website, under their pub vacancy section.
Applications for the pub will be invited and are compiled by the recruitment department. These will then be passed on to the Business Development Manager/Area Manager. They will know the pub well and have a good understanding of the skills, experience and financial resources that a new licensee for the pub will need. Then, they will arrange interviews for anyone who fits the requirements for the pub.
At the same time, the Business Development Manager/Area Manager, who is likely to have access to a database of suitable applicants (a talent bank) held by the brewery or pub company, will contact directly people who may be suitable, and invite them to apply for the vacancy. The manager may also approach existing tenants whom they think may be interested in taking on a new pub.
The Role Of The Business Developmentmanager/Area Manager
The role of a Business Development Manager/Area Manger is to maximise sales, and the profit and return on investment for the brewery or pub company, from the pubs that he is responsible for. They will typically have between 40 and 60 pubs under their control which they would be expected to visit on a 4–8 week cycle. The more pubs they have, the less time they have available to support licensees and deal with issues at the pubs.
Along with their responsibility to recruit new licensees, their other duties include:
- setting rents;
- forecasting and budgeting;
- preparing business plans;
- dealing with repair issues;
- handling licensing issues;
- capital development;
- marketing and promotions;
- providing business advice;
- enforcing the tie;
- credit control;
- training and coaching;
- selling new products.
Because of their wide-ranging responsibilities, there is often a great deal of pressure to fill vacancies quickly. A vacancy is often regarded as a problem that needs to be fixed as soon as possible. Presenting yourself as a means of solving this problem is the key to being successful in the recruitment process.