For years, critics of the pub company system have been using Ted Tuppen of Enterprise Inns as a dartboard targeting aid.  However now it appears we will need to find a new target of choice as the wicked witch of the pub world is stepping down from his role of twenty years as Chief Executive of one of the most hated companies in the pub industry come May 2014.    Succeeding him is Simon Townsend who has been on the board of Enterprise Inn for 14 years, thus having an integral role in the greedy and immoral business practices which have typified this company in the 21st century.

So this is a case of “the king is dead, long live the king”.  Tuppen founded the company off the back of the Beer Orders Act in 1991 when he purchased 368 pubs from Bass and currently owns about 10% of the country’s stock numbering 5,500 pubs at the last count, down from 8,500 at its peak.  Ted took a hard nosed line when it came to poor performers saying in 2010 “There’s a romance attached to pubs. They’re not shoe shops. Nobody minds if a shoe shop closes. But commercially it’s the same. If it’s uneconomic, that’s it.”.  The difference between a shoe shop and a pub is more than what it sells, people also lose their home when they leave a pub they have managed.

There is a gross hypocrisy at the heart of the company, their 2013 Interim Statement was titled “Publicans at the heart of our business”, yet they milk rents both dry and wet for all they can, continually cycle tenants through pubs whilst not being totally honest about the situation on the ground and keeps less favoured premises in a relatively poor state of repair.  A significant number of pub company tenants earn an effective wage of less that £10-15,000 per year for 70-90 hour weeks.  Over the last few years, hundreds of tenants have lost their homes and tens of thousands of pounds.

Looking at the Enterprise Inns Welcome Pack for new tenants, the second paragraph reads “This is your new business venture and we want to give you as much freedom as possible to run it your way. We want our relationship to be a longstanding collaboration, that is respected and fair“.  This statement is probably so far removed from the reality that faces the new tenant that it could be called an outright lie.  Some of the descriptions of pubs on their site are woefully out of date, for example a pub in Coventry is listed as “The pub is in close proximity to the Ricoh Arena and Coventry City Football ground, creating a huge benefit to the trade on match days and concerts”, when Coventry City are now playing in Northampton.

The additional fees listed on the sample agreements for everything from maintenance plans to pub services to buying out elements of your tie could soon add up to a substantial sum on top of your rent and inflated beer costs.   Is there any wonder that tenants struggle.  I know a number of people in the trade well, from Pub Company tenants to free house owners and the one thing I have observed is that the freeholder seems to get things done quicker than when it has to go through the chains of bureaucracy of a big parent company.   The PubCo’s also seem to ask you to prove yourself with your own money before putting their hands in their own pockets.  The freeholders also seem less stressed as they know that the 70-90 hour week they do will benefit them 100%.

Finally according to the Enterprise Inns 2012 annual report, Ted was due to take home between £1.5m and £2m after bonuses in 2012-13.  His pension pot isn’t too shabby either with Ted getting £160,000 paid into his pot on a basic salary of £640,000.  But I’m not finished yet, he was also getting 100% of his basic salary in shares, so in total he will receive at least £2.3m.  His replacement Simon Townsend will net nearly £1.3m after the same salary, bonuses, and pension payments in his current role.  In total Ted Tuppen owns nearly 8 million shares in Enterprise Inns which can be sold over the next 6 years each of which are currently worth £1.54 making them worth £12 million as we stand.

Nice if you can make it, but we can’t all be on the board of Enterprise Inns!