Punch Taverns
Encyclopedia
Punch Taverns plc is the largest pub
and bar operator in the United Kingdom
, with around 6,800 leased, tenanted and managed pubs. It is headquartered in the traditional brewing centre of Burton upon Trent
in Staffordshire
. It is listed on the London Stock Exchange
and is a constituent of the FTSE SmallCap Index
.
and Café Rouge founder Roger Myers
in 1997 when they bought the Bass portfolio of public houses. In 1999 Punch purchased Allied Domecq
's pubs for £3 billion, beating a rival bid from Whitbread
. After the deal, Punch spun off its managed pubs into a separate division, Punch Retail, which was later renamed Spirit Group.
In 2002 Punch demerged the Spirit Group and then floated itself on the London Stock Exchange
. Punch bought Pubmaster in November 2003: the acquisition of larger rival Pubmaster, catapulted the operator to number one in the league. The acquisition took the group to more than 7,000 pubs and cemented Punch's position as a major pub operator. After completing this deal Punch later bought InnSpired Inns plc
, and then Avebury.
Meanwhile, Spirit Group (at that time independent from Punch Taverns) expanded when it acquired Scottish & Newcastle
's 1,450-strong pub estate in 2003, beating off rival Mitchells & Butlers
.
In September 2005, Spirit Group sold its "City Nights" portfolio of in excess of 180 pubs and clubs, en-bloc, to Alchemy - the financial backers behind the newly-formed Tattershall Castle Group (TCG).
In December 2005, Punch agreed to re-acquire the Spirit Group for £2.68bn which since 2002 been owned by the private equity
firms Blackstone
, Texas Pacific and CVC Capital Partners
.
In 2006 the Company sold its Old Orleans pub chain, which it had acquired when it bought Spirit Group, to Regent Inns. Punch also sold 290 Spirit sites to the private equity firm GI Partners
.
In March 2008 Punch withdrew from a bid to merge with Mitchells & Butlers.
On 22nd March 2011 Punch announced that as part of a strategic review it would demerge its the managed and leased pub divisions into Spirit Pub Company plc and Punch plc; this demerger became effective on 1 August 2011.
s. The group owns over 800 outlets nationwide.
Pub chains owned by the Spirit Pub Company include Chef & Brewer
, Taylor Walker Pubs
, Fayre & Square, Two for £10 Pubs, Original Pub Company, Flaming Grill Pub Company, Roast Inn, John Barras Pub Company, Real Local Pubs, Two for One and Two for £9.
in 2004 and rebranded as Premier Travel Inn
hotels (now renamed as 'Premier Inn') However many Spirit Group run pubs remain integral parts of Premier Inn properties.
with struggling tenants.
Committee chairman Peter Luff
, MP says: "The report explicitly acknowledges that 'not all the problems of the pub industry come from the tied pub model. It is clear there are many pressures on any retail business ... Nonetheless, our inquiry found alarming evidence indicating there may be serious problems caused by the dominance of the large pub companies.'"
The Committee commissioned its own independent survey as part of the inquiry, to determine whether the negative evidence received from lessees was typical of feelings in the industry.
The committee recommended that "the tying of beers, other drinks and ancillary products should be severely limited to ensure that competition in the retail market is restored." The Eye notes that select committee chairman Peter Luff "may be looking to right the wrong created by the Thatcher
government’s disastrous "Beer Orders" of 1989, in which he was involved."
Shortly following the committee's report CAMRA issued a 'Super-Complaint' forcing the Office of Fair Trading to investigate this within 90 days. The OFT published its report on the 22nd of October 2009. The report largely cleared the industry of behaving in any way that caused damage to consumers
Public house
A public house, informally known as a pub, is a drinking establishment fundamental to the culture of Britain, Ireland, Australia and New Zealand. There are approximately 53,500 public houses in the United Kingdom. This number has been declining every year, so that nearly half of the smaller...
and bar operator in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, with around 6,800 leased, tenanted and managed pubs. It is headquartered in the traditional brewing centre of Burton upon Trent
Burton upon Trent
Burton upon Trent, also known as Burton-on-Trent or simply Burton, is a town straddling the River Trent in the east of Staffordshire, England. Its associated adjective is "Burtonian"....
in Staffordshire
Staffordshire
Staffordshire is a landlocked county in the West Midlands region of England. For Eurostat purposes, the county is a NUTS 3 region and is one of four counties or unitary districts that comprise the "Shropshire and Staffordshire" NUTS 2 region. Part of the National Forest lies within its borders...
. It is listed on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
and is a constituent of the FTSE SmallCap Index
FTSE SmallCap Index
The FTSE SmallCap Index is an index of small market capitalization companies consisting of the 351st to the 619th largest listed companies on the London Stock Exchange main market...
.
History
The company was established by former Pizza Express head Hugh OsmondHugh Osmond
Hugh Edward Mark Osmond is the founder of Punch Taverns, one of the United Kingdom's largest chains of public houses.-Career:Educated at Merton College, Oxford where he read Medicine, Hugh Osmond went to America in 1983 and worked in clubs for a while. He then joined a small investment bank in...
and Café Rouge founder Roger Myers
Roger Myers
Roger Myers is the co-founder of Punch Taverns, one of the United Kingdom's largest chains of public houses.-Career:Born in East Ham and educated at Quintin Kynaston Grammar School, Roger Myers joined Goodman Myers Smith, a firm of accountants in 1964. In 1966 he became a Partner in the firm which...
in 1997 when they bought the Bass portfolio of public houses. In 1999 Punch purchased Allied Domecq
Allied Domecq
Allied Domecq PLC was an international company, headquartered in Bristol, UK that operated spirits, wine, and quick service restaurant businesses. It was once a FTSE 100 Index constituent but has been acquired by Pernod Ricard.-History:...
's pubs for £3 billion, beating a rival bid from Whitbread
Whitbread
Whitbread PLC is a global hotel, coffee shop and restaurant company headquartered in Dunstable, United Kingdom. Its largest division is Premier Inn, which is the largest hotel brand in the UK with around 580 hotels and over 40,000 rooms. Its Costa Coffee chain has around 1,600 stores across 25...
. After the deal, Punch spun off its managed pubs into a separate division, Punch Retail, which was later renamed Spirit Group.
In 2002 Punch demerged the Spirit Group and then floated itself on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
. Punch bought Pubmaster in November 2003: the acquisition of larger rival Pubmaster, catapulted the operator to number one in the league. The acquisition took the group to more than 7,000 pubs and cemented Punch's position as a major pub operator. After completing this deal Punch later bought InnSpired Inns plc
Ushers of Trowbridge
Ushers of Trowbridge was a brewery located in Trowbridge, Wiltshire.In 1824, Thomas Usher and his wife Hannah acquired a small brewery in Back Street, Trowbridge, renaming it Usher's Wiltshire Brewery. In 1844, the couples three sons joined the partnership, allowing the parents to retire in 1869...
, and then Avebury.
Meanwhile, Spirit Group (at that time independent from Punch Taverns) expanded when it acquired Scottish & Newcastle
Scottish & Newcastle
Scottish & Newcastle plc was a "long alcoholic drinks" company with positions in 15 countries, including UK, France and Russia. It was headquartered in Edinburgh, Scotland, UK. In the last 20 years, S&N expanded significantly from its home base to become an international business with beer...
's 1,450-strong pub estate in 2003, beating off rival Mitchells & Butlers
Mitchells & Butlers
Mitchells & Butlers plc runs around 2,000 managed pubs, bars and restaurants throughout the United Kingdom. The Company's headquarters is in Birmingham, England, United Kingdom...
.
In September 2005, Spirit Group sold its "City Nights" portfolio of in excess of 180 pubs and clubs, en-bloc, to Alchemy - the financial backers behind the newly-formed Tattershall Castle Group (TCG).
In December 2005, Punch agreed to re-acquire the Spirit Group for £2.68bn which since 2002 been owned by the private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firms Blackstone
Blackstone Group
The Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, real estate, and credit and marketable alternative investment strategies, as well as financial advisory services, such as mergers and acquisitions ,...
, Texas Pacific and CVC Capital Partners
CVC Capital Partners
CVC Capital Partners is one of the top five largest private equity firms globally with approximately US$46 billion in funds focused on management buyouts...
.
In 2006 the Company sold its Old Orleans pub chain, which it had acquired when it bought Spirit Group, to Regent Inns. Punch also sold 290 Spirit sites to the private equity firm GI Partners
GI Partners
GI Partners L.P. is a private equity firm based in Menlo Park, California and London, England.- Description :...
.
In March 2008 Punch withdrew from a bid to merge with Mitchells & Butlers.
On 22nd March 2011 Punch announced that as part of a strategic review it would demerge its the managed and leased pub divisions into Spirit Pub Company plc and Punch plc; this demerger became effective on 1 August 2011.
Leased pubs
The Group has about 6,000 leased and tenanted pubs forming the bulk of the portfolio.Spirit Pub Company
Spirit Pub Company is the managed arm of Punch Taverns operating several pub chainPub chain
A pub chain is a group of pubs or bars with a brand image. The brand may be owned outright by one company, or there may be multiple financiers; the chain may be a division within a larger company, or may be a single operation. Examples include Chef & Brewer, Wetherspoons, Walkabout, Taylor Walker...
s. The group owns over 800 outlets nationwide.
Pub chains owned by the Spirit Pub Company include Chef & Brewer
Chef & Brewer
Chef & Brewer is a chain of around 127 licensed traditional pub restaurants in the United Kingdom, owned by Punch Taverns.-History:Following the merger of Grand Metropolitan and Guinness, to form Diageo in 1991, Chef & Brewer pubs were bought by Scottish & Newcastle in 1993 in a part cash, part...
, Taylor Walker Pubs
Taylor Walker Pubs
Taylor Walker is a chain of around 106 licensed pubs in the United Kingdom, owned by Punch Taverns. They are known for serving cask ale, sharing plates and platters and British classics such as hand battered cod and pies which are among the most popular choices....
, Fayre & Square, Two for £10 Pubs, Original Pub Company, Flaming Grill Pub Company, Roast Inn, John Barras Pub Company, Real Local Pubs, Two for One and Two for £9.
Premier Lodge
Spirit Group formerly owned the Premier Lodge chain of budget hotels. These were acquired by WhitbreadWhitbread
Whitbread PLC is a global hotel, coffee shop and restaurant company headquartered in Dunstable, United Kingdom. Its largest division is Premier Inn, which is the largest hotel brand in the UK with around 580 hotels and over 40,000 rooms. Its Costa Coffee chain has around 1,600 stores across 25...
in 2004 and rebranded as Premier Travel Inn
Premier Travel Inn
Premier Inn is the UK's largest hotel brand, with over 40,500 rooms and more than 600 hotels. Originally opening under the "Travel Inn" brand name in 1987, it has been owned by Whitbread during its entire operation and was set up to compete with the Travelodge brand which was at the time owned by...
hotels (now renamed as 'Premier Inn') However many Spirit Group run pubs remain integral parts of Premier Inn properties.
Reflections on business practice
On May 13, 2009, the House of Commons published a report regarding its monopolies inquiry into pub groups. The report "raises a series of questions about the pub company (pubco) tied pub business model and calls on the Government to act urgently, in particular, to refer the matter to the Competition Commission. It challenges the pubcos which operate a tie to prove its benefits by giving lessees the choice between a tied or free of tie lease." The report also raises issues regarding the actual conduct of pubcos in dealingwith struggling tenants.
Committee chairman Peter Luff
Peter Luff
Peter James Luff MP is a British Conservative Party politician. He has been the Member of Parliament for Mid Worcestershire since the 1997 general election, and was MP Worcester from 1992 until 1997...
, MP says: "The report explicitly acknowledges that 'not all the problems of the pub industry come from the tied pub model. It is clear there are many pressures on any retail business ... Nonetheless, our inquiry found alarming evidence indicating there may be serious problems caused by the dominance of the large pub companies.'"
The Committee commissioned its own independent survey as part of the inquiry, to determine whether the negative evidence received from lessees was typical of feelings in the industry.
"The survey results, printed with the Committee’s evidence, underpinned the Committee’s findings. 64 per cent of lessees did not think their pubco added any value and while a fifth had had a dispute with their pubco, few (18 per cent) were satisfied with the outcome. The Committee was astonished to learn that 67 per cent of the lessees surveyed earned less than £15,000 pa and over 50 per cent of the lessees who had turnover of more than £500,000 pa earned less than £15,000 – a 3 per cent rate of return. The lessees may share the risks with their pubco but they do not appear to share the benefits.
The report therefore concludes that problems which were identified by the Trade and Industry Committee four years ago remain. An imbalance of bargaining power between lessees and pubcos persists and the arrangements for assessing rents remain opaque. Rental assessment should be the basis for negotiation, but incumbent lessees often risk the loss of their home as well as their business if they cannot reach agreement, the report says."
The committee recommended that "the tying of beers, other drinks and ancillary products should be severely limited to ensure that competition in the retail market is restored." The Eye notes that select committee chairman Peter Luff "may be looking to right the wrong created by the Thatcher
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...
government’s disastrous "Beer Orders" of 1989, in which he was involved."
Shortly following the committee's report CAMRA issued a 'Super-Complaint' forcing the Office of Fair Trading to investigate this within 90 days. The OFT published its report on the 22nd of October 2009. The report largely cleared the industry of behaving in any way that caused damage to consumers