You will have to forgive this post, it is without doubt a rant but a well needed one.
As you know I am a publican and as you also know all pubs in the country are currently closed. Now if you read the various forums and social media streams from the licensed trade then you probably also ‘know’ that all property landlords are evil and eat babies. You ‘know’ that all publicans are angelic hardworking and earn nothing and you ‘know’ that the support of hospitality ‘needs’ to continue for 5 years at least.
This is what I am seeing on a daily basis, it has got so bad that I no longer listen to the radio in the day because I am sick to the back teeth of the shameless way that inept operators are embarrassing this trade. Publicans used to be pillars of the community and many still are but the loudest voices make us look like snivelling kids begging for more all of the time.
The hospitality industry has had an unprecedented amount of support to get through Covid-19, more than anyone could have envisaged a few months ago. I want to look at the grants in particular, to be clear this is cash given to a business not a loan not a deferral it is real money paid into the bank .
From day one the message board were filled with whines about ‘when will I get it’ in fact by the end of week two I read publicans honestly claiming that they only had ‘5 days of food left for the family’. Firstly this is a business grant, do with it what you wish but it was not established to feed you and your kids fillet steak.
Mobilising this amount of money takes time and there has to be checks and balances within the system. If the money had all been distributed overnight by central government then there would have been justified uproar at money being sent to ex publicans, dead people and cats.
From about week three the ‘trade’ has been saying they need more grants, like a needy child looking for more milk. I have seen stories of people who are honestly moaning that they have spent £25K on bills for a closed pub in 5 weeks. There is currently no rent or rates so what the hell can you spend that much on? Especially when the majority of these publicans refused to pay their staff a penny until the furlough scheme kicked in.
I read today a woman at her ‘wits end’ because she had spent half her grant already on ‘vat and back rent’ whoa hang on a minute… VAT is collected by you on behalf of the government so you had this money, where did that go? and you owed your landlord rent, so you used the taxpayer grant to clear some bills did you? Well that might be where you are going wrong.
Anecdotally I am reading of people paying off their credit card bills, car loans and last payments on holidays before demanding the government does more to help them. These are not business people, and the pubs that they run are not businesses.
Then there is the satanic cult of the pub companies who have stopped collecting rent but refuse to make a blanket statement that you can have your property rent free for 9 months. Such is the anger at these awful organisations that the licensed trade is demanding that the government force the private companies to grant their wishes, come on Tinkerbell you can do it.
I have written about this before but the pub company is an intermediary. They borrow the money to buy the pub that you rent off them. Of course they cannot declare a blanket forgoing of rent, they have lending covenants and shareholders and nobody knows how long this will go on for. Some tenants are trying to make offers to buy the freeholds at a reduced rate, this may at least knock some sense into them.
Before every pub in the country was closed down commercial lending was considered high risk, mortgages struggled at 50% LTV and needed 40% deposits to achieve 6-9% above base rate. I don’t imagine that not trading has improved the appetite of the lenders. So off you trot Bob with your happy smile and clutching your last weeks Z read and see how hard the banks laugh at you. Buying pubs is tough, lending is expensive and if it wasn’t you wouldn’t be a tenant would you?
Then we hear that grants are ‘not for paying rent’ yes they are! Bloody hell Bob you don’t even have to read anything, the nice man on the TV explained it, all you had to do was listen. The grant was intended for fixed business costs and rent is one of those in that it is fixed whether you trade or not. It is a bit like a mortgage on your house, if you are not there for a month you still have to pay it.
Throughout this tenants are paying private landlords or coming to sensible agreements. They are paying mortgages or deferring payments. The quiet ones in this trade are continuing to do what we do whilst collectively tutting the idiots who just make us all look bad.
So to be clear the whining idiots that you see are not publicans, they are chancers and failures and dreamers. They are probably all very nice people but they are still chasing the seat at the end of the bar with brandy and cigars, chasing but not working very hard.
We have been closed for 6 weeks, 14 pubs a week change hands due to closure every week so that is 84 pubs that we the taxpayer are currently keeping afloat. But we are not are we, we are keeping Bob afloat and Sharon and all of the people who think that the reason that they are not living the dream is because of the evil landlords. When we all reopen theses pubs will still fail no matter how long the government pour our money into them.
One other point that seems to have passed Bob et al by is basic maths. You see they are all losing a fortune but, of course, that is not the truth. The true loss is the money currently leaving your bank account for the period of closure. That party you had booked in for last Saturday, that is not a loss Bob that is a lost opportunity try and remember that. And do try and remember that pubs were closed on the 20th of March, that overdue account from Christmas that really isn’t Covid-19 related now is it?
The conventional wisdom is that a business should have sufficient liquid capital to cover 3-6 months of fixed costs. So we have been closed 6 weeks and you have been given some form of state assistance. Pipe down Susan I know you didn’t get a grant you have told everybody because it is just so unfair. You did get rates relief though, so if you were at the very bottom of the band you are saving just shy of £500 a week.
I know its not real money Susan and you can’t touch it but try this little trick. Place the money you would usually use to pay your rates on the table in front of you, touch it, feel it, its real isn’t it? Well you can keep that, how nice is that?
So lets be clear, if you cannot cover your fixed costs minus rent and rates (the two largest fixed costs) then you are not a viable business, you will not survive. Stop the teary eyed emojis and clapping the NHS and do the whole country a real favour, stop milking the state aid chuck the keys in and f*ck off.
There are a great many great tenants running good businesses please don’t think I am tarring all with the same brush. I am just so tired of reading whining posts from incompetent and bankrupt tenants who will all exit stage left when beer duty and VAT rise to pay this all back. This is a tough trade, it has been for years, but there are some tough operators and they are just getting on with it.
Thanks for listening (I know you speed read it) I feel marginally better and am off to do some decorating while Bob applies for some charity loan.
NOTE: All names are made up apart from mine, I think I am real….