Under-fire brewery giant defends decision over pub tenant rents

Nick Mackenzie, chief executive of Greene King, who has strongly defending the company's position on

Nick Mackenzie, chief executive of Greene King, who has strongly defending the company's position on pub rents Picture: ADAM SMYTH - Credit: Archant

Brewery and pubs giant Greene King has strongly defended its decision not to blanket-waive rents for struggling tied tenants forced to shutter up because of the coronavirus crisis.

Apart from a skeleton staff supplying supermarkets with beer, the vast majority of Greene King staff

Apart from a skeleton staff supplying supermarkets with beer, the vast majority of Greene King staff have been furloughed Picture: ADAM SMY - Credit: Archant

The Bury St Edmunds group - which has come under fire from some tenants for stopping short of cancelling rents altogether – is offering help on a case-by-case basis to its tenanted pubs.

But while it has agreed to a rent delay while the crisis continues, it hasn’t gone as far as some groups such as Southwold-based Adnams in cancelling rents.

MORE – Retailer rewards staff with extra week’s pay for their efforts during coronavirus lockdownGary Murphy, a Greene King tenant of Ye Olde Mitre in Barnet, London, has hit out at the company for its stance, claiming it was “greed”. “Four weeks with a closed pub and I now owe Greene King £8,000 in rent. Greene King made £246.9m last year and the taxpayer is currently paying for their furloughed staff,” he complained on his Facebook page.

Pub groups including Southwold-based Adnams, Admiral Taverns and Fullers attracted praise from consumer lobby group agreed the Campaign for Real Ale (CAMRA) after announcing the cancellation of rent for pub tenants back in March.

Greene King says it must balance the needs of the whole business Picture: CHRIS BISHOP

Greene King says it must balance the needs of the whole business Picture: CHRIS BISHOP - Credit: Archant

Admiral Taverns – one of the ‘big six’ UK pub companies – has so far committed to the end of April, but none of the other ‘big six’ – which includes Greene King – has gone that far and will be wary of any open-ended commitment given the uncertainty around when pubs may re-open.

In a letter to CAMRA, Greene King’s new boss Nick Mackenzie stressed that the group was working “around the clock to offer protection and support to our 38,000 employees and 1,000 leased and tenanted partners”.

“Like countless other businesses, we are in a difficult financial position and are having to make difficult decisions to safeguard the survival of our business,” he added.

Most Read

Greene King was snapped up by Hong Kong property magnate Li Ka-Shing for £4.6bn last year.

Pubs and pub companies are under immense pressure, a Greene King spokesman says Picture: PA IMAGES

Pubs and pub companies are under immense pressure, a Greene King spokesman says Picture: PA IMAGES - Credit: PA Archive/PA Images

But its cashflow has ground to a halt with the closure of its 1700 managed and 1000 tenanted pubs.

Its brewery operation at Bury St Edmunds is still operating within government coronavirus distancing guidelines but that is at vastly reduced levels, with only a small portion of its 800-strong workforce supplying to the off-trade, such as supermarkets.

Greene King tenants are being offered support via a partner support scheme which it has set up. The company would not disclose how much it had set aside for this, but a spokesman said it was “a significant sum of money”. And although some tenants had raised issues, the majority understood the company’s position, he stressed.

“All pubs and pub companies are under immense pressure currently and we acted swiftly to alleviate any immediate cash flow concerns for our leased and tenanted partners by deferring rent,” the spokesman said.

“Since then we have been working on long-term proposals that can work alongside government schemes to offer tailored financial support on rent to our tied tenants who have been impacted most by this crisis.

“As an employer of 38,000 people who will rely on us for their livelihoods we have to take financially responsible decisions.

“There isn’t a one size fits all solution and the support plan we’ve communicated to our leased and tenanted partners is fair, bespoke and aims to ensure that as many of our partners as possible are able to emerge from this crisis in a strong position, as we all look to recover our businesses together.”

Subscribe to our daily coronavirus newsletter, with all the latest from where you live. Or visit our Facebook page or link to our daily podcast here