Young guns are the inn crowd
Britain's pubs are passing from the hands of the old order, writes Dan Gledhill
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.When the die was cast, Giles Thorley was a 21-year-old undergraduate studying prop-erty. Ted Tuppen, a 36-year old accountant by training, was looking for a new career to cut out the travelling necessitated by his engineering business. Hugh Osmond was a 27-year-old medical graduate growing bored of his computer software venture.
Ten years after the 1989 Beer Orders, the act that forced the big brewing families to put 11,000 of their premises on the market, these three men between them control almost 8,000 pubs and have designs on thousands more. They are part of a brat pack of maverick landlords, whose innovations have overturned centuries of tradition - causing historic publicans like Bass, Allied Domecq and Scottish & Newcastle to reinvent their businesses.
Tuppen runs Enterprise Inns, a quoted company with 2,270 pubs around the country. Thorley's Unique Pub Company has 2,614 premises.
Osmond works for Punch Taverns, a privately owned operator with 1,800 establishments. He is battling to make Punch the nation's biggest landlord by securing the 3,600 pubs that Allied Domecq has put up for sale. Osmond's ambition has brought him head-to-head with the beer establishment (the beerage) in the shape of Whitbread, which last week announced a deal to buy the Allied estate.
While the likes of Thorley, Tuppen and Osmond have spent the last few years gobbling up unwanted pubs, the aristocrats of brewing have been busily spewing them out. Allied Domecq, formerly Allied Lyons, is the latest of the big names to signal its retreat. The Beer Orders limited Bass's estate to under 4,700 outlets, prompting the company to indicate that its future lies in hotels. With Greenalls also slimming its portfolio, Whitbread's fight for the Allied estate represents the beerage's last stand against upstarts like Osmond.
The idea of entering the pub trade first entered Tuppen's mind 10 years ago when he realised the implications of the Beer Orders.
Lord Young, then the Conservative Secretary of State for Trade and Industry, had decided to act in response to growing complaints about the power of the big six brewers - Allied Lyons, Bass, Courage, Grand Metropolitan, Scottish & Newcastle and Whitbread. Their control of the nation's pubs was cemented by the tied-house system, which provided them with a guaranteed outlet for their beer. This concentration of power had accelerated in the 1980s, as several regional brewing families, notably the Farrs of Nottingham and the Ruddles of Oakham, were swallowed up.
The Government's solution was to put a ceiling on the number of outlets each brewer was permitted to own.
"All of a sudden, Lord Young was putting 11,000 pubs on the market, which would have to be sold within three years," says Tuppen. "I thought that there has to be a business here."
On graduating, Giles Thorley had planned a career at the Bar - the legal variety, that is. Instead he joined Nomura, under the tutelage of the now-legendary principal financier, Guy Hands. Nomura had just taken charge of 1,800 pubs with the acquisition of Phoenix Inns, and Thorley was assigned to look after them in a venture since named the Unique Pub Company.
"My main love is property," he says. "I saw pubs as property assets."
Nomura has continued to acquire pubs, most recently the 1,241 it acquired last year from Greenalls. More than any other, this deal represented the changing of the pub guard. Greenalls is still chaired by Lord Daresbury, Eton-educated scion of the Warrington-based brewing family. Hands, by contrast, learned his trade at Goldman Sachs, the US investment bank.
Osmond made his fortune with the flotation of Pizza Express before turning his attention to Britain's pubs.
"While cinemas and restaurants have become centres of entertainment, the majority of publicans haven't got the message. There are a few of us interested in changing that," he says.
Osmond approached Allied Domecq last month with a proposal to buy its pub estate. The following week, Allied revealed it was in exclusive talks to sell to Whitbread, its long-standing ally. No wonder he feels a kindred spirit with fellow upstarts Tuppen and Thorley.
"Ted, Giles and I come from outside the industry, and we often get together to moan about the brewers," he says. "They have run the industry in the same way for hundreds of years, so the arrival of new people and new ideas must be a good thing."
Whitbread has been running down its pub estate since the early 1970s. A portfolio which once boasted 12,000 outlets had almost halved by 1989 with the demise of many inner-city locals. The stipulations of the Beer Orders forced the disposal of another 2,000 and by this year Whitbread's estate was down to 3,900.
But with the disclosure that Allied Domecq's under-invested estate was available, Whitbread spotted the chance to revive its estate and get out of brewing - a move necessitated by the Beer Orders.
Meanwhile, Osmond, aware that institutional investors have developed an aversion to small companies, is determined to create a business large enough for a successful flotation and has the whole-hearted backing of Texas Pacific, the US buy-out specialist which has just taken a 70 per cent stake in Punch.
Thorley and Tuppen are on the lookout for acquisitions, as is John Sands, managing director of Hartlepool-based Pubmaster. And John Moulton, the deal-maker who heads venture capitalist Alchemy, is expected to announce a bid for Inn Business.
Britain's brat pack of pub landlords is on the move - unless, of course, the Government decides the nouveau beerage deserves the same fate as the original.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments