GREENE KING PUB PARTNERS ANNOUNCES INCREASED RENT CONCESSIONS FOR TIED TENANTS UP UNTIL CHRISTMAS
Greene King Pub Partners has announced all its tied pub tenants will receive at least a 40% rent discount up until Christmas, with pubs that are closed under government measures receiving a 90% rent discount. It brings its estimated financial support for its 975 tied tenants to more than £25m since the Covid-19 pandemic closed the UK’s pubs.
All tied tenants were notified this week and the update comes in the face of further government restrictions limiting trade in pubs, with speculation that some areas of England may see pubs shut down again next week, in what would be a devastating blow for the industry, putting thousands of jobs at risk.
The new support announced by Greene King Pub Partners is backdated to 27 September and is tiered as follows:
- From 27 September 2020 to 24 October 2020 tied partners will receive a rent credit of 50%
- From 25 October 2020 to 21 November 2020 tied partners will receive a rent credit of 45%
- From 22 November 2020 to 26 December 2020 tied partners will receive a rent credit of 40%
Also, an existing discount on barrels purchased from Greene King will now run until 27 March 2021, with tied tenants receiving a trade credit of £35 per barrel.
Additionally, any pubs that have to close under a government lockdown will receive a 90% rent discount while they are closed, for up to four weeks. If they are still closed after four weeks, this will be reviewed and balanced against any additional financial support that may have been announced by the government.
This new level of support will be implemented in Scotland this weekend, with all tied tenants notified they would receive a 90% rent discount for the 16-day closure period announced by the First Minister. Although pubs outside the Central Belt can remain open from 6am-6pm during this period, they are prohibited from selling alcohol indoors and alcohol can only be served outdoors until 10pm which effectively shuts the pubs in all but name and so the decision was taken to apply the 90% rent discount across the board.
Once this next wave of support is coming to an end there will be a review of whether additional support is required into 2021.
Greene King Pub Partners managing director Wayne Shurvinton said: “We are doing all we can to support our leased and tenanted partners at this extremely worrying time for them. Even pubs in areas with lesser restrictions are seeing their trade greatly impacted by the 10pm curfew and the worry is that this will only worsen throughout the winter.
“The new measures announced in Scotland, which effectively close down pubs, are devastating for us and our tenants. Those in England now also have the prospect of further shutdowns in the weeks ahead.
“This additional rent support for our tenants shows our commitment to supporting UK pubs as we all try to weather this storm together. We understand that firm and decisive action is needed to tackle the threat of Covid-19, however to impose additional restrictions on an entire industry without adequate financial support from the government puts hundreds of businesses in a precarious position and leaves thousands of livelihoods at risk.”
Greene King tied tenants have received the following support to date:
- All pub rents were immediately deferred for the entirety of the period pubs were closed.
- From 20 March to 10 June (first 12 weeks of closure) a Partner Support Fund was launched. One-to-one discussions took place with all tied pubs to understand their immediate financial situation so rent concessions could be targeted at pubs that had not been eligible for any government grants. Pubs with a rateable value under £51,000 were eligible for a government grant up to £25,000 to allow businesses to continue paying fixed costs, such as rent.
- From 11 June all tied pub tenants received a 90% rent concession that ran until four weeks after a pub was legally able to reopen, at which time a 50% rent concession continued for another four weeks.
- On 21 August all tied tenants were notified they would receive a 40% rent concession for a further four weeks after the previous round of support came to an end, then a 30% rent concession would continue for the four weeks after that, taking support through until October. This has been superseded by the new increased level of support announced this week.
- All the unopened kegs and casks that were out of date and unsaleable in pubs while they were closed were replaced for free with fresh stock on reopening in July, at a total cost of approximately £1.3m + VAT.
- Every single Greene King tied tenant was signed up to be a member of the BII (British Institute of Innkeeping), an independent body that provides expert advice on everything from legal and licensing issues to tax queries. Membership usually costs £155 per pub per year. This covers the next two years and will be reviewed on an annual basis.
- All partners received £250 of PPE support for free, as well as £120 of Covid-19 signage, plus the offer of free training courses and business support planning.