Press Release

PRESS RELEASE: 9/3/10

Punch Taverns is to face court claims over the validity and accuracy of information it provided about a pub's trade to induce tenants into signing a lease which gave them no chance of success.

The UK's largest pubco will be accused of negligently distorting previous levels of trade in a case due to be heard at Nottingham County Court this month.

The dispute, which could have implications across the licensed trade, centres on the Robin Hood pub in Sherwood, Nottingham.

It traded as a John Barras chain outlet before Punch offered it for lease in 2006 - despite retaining other Barras pubs in the area as managed houses following a review.

In the same year Philip Sambell, Julian Phillips and David Hope were looking to run a pub as tenants.

They looked at several in Nottingham before beginning negotiations to lease the Robin Hood from Punch and finally took over the business in the summer of 2007.

Since then they have invested their life savings of £90,000 and have transformed the business from a run-down chain outlet into a vibrant, award-winning community pub.

But despite their success in turning the pub's fortunes around its finances have been blighted by the terms of the lease - which they claim was based on false figures.

Now the trio are preparing to take on Punch in a legal fight to prove they were misled into entering a business arrangement which could only end in failure for them.

Mr Sambell, the licensee with 30 years trade experience, said: "Our business plan was based on the very limited financial information available from Punch – principally the barrelage for the previous 12 months in the Christies brochure where we first saw this opportunity and from purportedly current barrelage figures we were given in response to our request for historic and current information when we were creating our business plan.

"We went into this with our eyes open - we knew the smoking ban was imminent, we knew there had been a World Cup the previous summer.

"We came up with a very conservative estimate of future trade taking all these factors into account and build our projections around that.

"But what we did not and could not know is that the barrelage figures given to us by Punch were some 30 per cent higher than the real figure.

"That's a difference of around 65,000 pints a year, a huge amount in financial terms which meant all our predicted takings were meaningless."

Mr Sambell, 50, said he discovered the true barrelage soon after taking over the pub, when Punch granted access to monitoring figures provided by Brulines and was able to download the previous year’s dispense data from when the pub was managed by the Spirit Group ( a division of Punch).

Brulines is an independent company which electronically monitors the amount of beer dispensed by each pump in over 22,000 houses across the UK.

"The Brulines figure was radically different from that provided by Punch," Mr Sambell said.

"It may be of great interest to Brulines and other licensees that Punch is now claiming that because the pub was a managed pub (at the time) that the 'the Brulines data was neither monitored nor accurate”

"As Brulines' figures are used by pubcos to evict tenants they believe are buying beer outside their tie agreement any suggestion they are inaccurate is very serious."

After discovering the true picture the trio tried to talk to Punch but claim the company refused to admit any wrongdoing and the information on the previous years dispense data disappeared from view.

"We tried to get them to talk about reducing the rent and address the problems we had identified but they steadfastly refused," Mr Sambell added,

"But even at this late stage we are prepared to sit down and try to thrash out an agreement which compensates us for our losses and sets a level playing field for the future, however even our offer of independent mediation has been refused.

"We have invested our life-savings and three years of our lives into this business and do not want to walk away but Punch just does not seem interested which we find strange if compared to their public stance”

“In their latest Interim Management Statement Punch speaks of introducing a number of improvements “to cement our commitment to build more honest and transparent partnerships with our licensees”.

“Perhaps they should now live up to that commitment to their shareholders and their tenants”

At a preliminary hearing last year the trio won a partial victory when they were released from their tie to Punch pending the outcome of the case which is listed for five days beginning on Monday, March 15.

For your ease of reference the case is listed as:

PUNCH PARTNERSHIPS (PUBS) LIMITED V SKITTLES AND BEER LIMITED, HOPE, PHILLIPS AND SAMBELL CLAIM NUMBER 9NG03871