Greene King slashes rents for tied tenants as sector faces ‘existential threat’
- Credit: Archant
A pubs and brewing giant is set to write off millions of pounds in rent from its tied tenants in a bid to help them through the coronavirus crisis.
With pubs in lockdown, Greene King has already provided around £4m in rent concessions to its 975 tied tenants, but has now gone one step further with a 90% cut in rents from June 11 until pubs can reopen – with the same concession for their first four weeks after reopening.
After that, the Bury St Edmunds-based pubs group will be allowing them to pay half their rent over the following four weeks.
MORE – Pubs group agrees to rent delay for tenanted pubs during coronavirus lockdownTied tenants will also receive eight weeks of trade support when buying barrels of beer or cider from Greene King after their relaunch.
Greene King initially offered support on a case-by-case basis but has come under fire for not going further. Smaller pub owners like Southwold-based brewer Adnams took an early decision to cancel rents, but its west Suffolk neighbour adopted a more guarded approach, arguing that it also needed to balance the needs of its large managed pubs business.
However, it did launch a Partner Support Fund and held one-to-one discussions with all its tied pubs to gauge their immediate financial needs to see which were not eligible for any government grants.
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Pubs with a rateable value under £51,000 have been able to apply for a government grant of up to £25,000 to allow businesses to continue paying fixed costs, such as rents.
The pubs giant continues to lobby government for more support for the hospitality sector to enable it to cope with fixed costs while closed.
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Wayne Shurvinton, managing director of Greene King Pub Partners, said from the outset the company had wanted to balance as much support for its tenants as it possibly could alongside ensuring the long-term survival of the company.
“None of us are immune to the financial implications of pubs closing and we all have to work together to survive this existential threat to our industry.
“I’m grateful to every single one of our tenants who has worked with us and trusted that we were doing all we could to look after them.
“We feel we’ve played our part and it is critical the government continues to play its part in supporting our sector. The support so far is extremely welcome but as a tenant ourselves with over 500 landlords, we have not received rent concessions in the way we are offering them to our tenants and further support on rent payments is needed to support the recovery of the pubs sector.”
Greene King Pub Partners has also pledged to replace all unopened kegs and casks in tenants’ cellars at an estimated cost of £1.3m plus VAT.