Steve
Corbett - 16/09/2011 15:14:26
Matthew, thanks again for responding.
The nature of the rent review process is inherently confrontational and whilst the illusion of partnership is much touted by the pubcos it is rarely, if ever, a reality. And as more money is needed by pubcos to service debt the relationship between pubco and tenant remains far from perfect. This, as far as Fair Pint is concerned, is why trade bodies need to look closely as their real obligations to members and why supposedly independent bodies such as the FLVA and the BII must move away from conflicts that are currently so badly damaging the sector.
In your response above, much of which I agree with, you choose to hide behind statements such as “I am not privy to the decisions or the funding of the FLVA executive” then wonder why questions surrounding conflicts within your organisation are repeatedly being asked. It's this “I don't really know” approach that has continually let down tenants for far too long leaving them poorly represented by people who ought to know better. If we are to move forward with a truly independent, representative body then it can't be a disingenuous replication of the existing and failing support groups or by papering over industry cracks. If you don't know the answer Matthew then perhaps you have an obligation to your membership to find out.
Whilst I accept that the rent review process contains a certain amount of negotiation a lower rent may not be the correct rent for the tenant or the pub. For far too long 'horse dealing' may have got rent quotes down from an excessive increase to a nominal or nil increase in the past but where the open market rental value is less than the passing rent a falsely inflated tied rental value has been created. This is the sectors Achilles heel. Tenants, at all times, need to take professional advise from a surveying practice or a suitably qualified expert that is on their side and not conflicted with financial relationships with pubcos or brewers.
Fair Pint, along with the IPC and others, is calling for tenants to be offered a genuine free of tie option and we are openly campaigning for reform in a sector which seems to be dominated by large companies and trade representatives behaving as a cartel and suppressing real information about the real problems faced by publicans. The tie isn't the only problem in the sector and to my knowledge no one in FP ever said it was. That said, the beer tie in its various forms has been damaging the licensed sector for many years and in times of much needed change you encounter dinosaur like thinking arguing for the maintenance of an outdated business model for no other reason than that it supports a lifestyle to which a few have become accustomed. There was no need for pubcos and brewers rip off their tenants with unreasonable beer prices that leave their businesses uncompetitive. Sadly they do. The sector isn't able to reform itself Matthew – codes of practice tinkle with the bells and whistles but conveniently avoid the real issues. The industry needs reform and that unlikely to happen without government intervention.
If tenants are now questioning the motives and integrity of organisations such as the FLVA and the BII than that can only be a good thing. For far too long conflicted bodies have waved the flag of a rapidly declining sector whilst ignoring the real cause of that decline. Perhaps now, with groups such as IPC, JFL, Fair Pint and the good work done by the GMB we can begin that much needed reform process.
The nature of the rent review process is inherently confrontational and whilst the illusion of partnership is much touted by the pubcos it is rarely, if ever, a reality. And as more money is needed by pubcos to service debt the relationship between pubco and tenant remains far from perfect. This, as far as Fair Pint is concerned, is why trade bodies need to look closely as their real obligations to members and why supposedly independent bodies such as the FLVA and the BII must move away from conflicts that are currently so badly damaging the sector.
In your response above, much of which I agree with, you choose to hide behind statements such as “I am not privy to the decisions or the funding of the FLVA executive” then wonder why questions surrounding conflicts within your organisation are repeatedly being asked. It's this “I don't really know” approach that has continually let down tenants for far too long leaving them poorly represented by people who ought to know better. If we are to move forward with a truly independent, representative body then it can't be a disingenuous replication of the existing and failing support groups or by papering over industry cracks. If you don't know the answer Matthew then perhaps you have an obligation to your membership to find out.
Whilst I accept that the rent review process contains a certain amount of negotiation a lower rent may not be the correct rent for the tenant or the pub. For far too long 'horse dealing' may have got rent quotes down from an excessive increase to a nominal or nil increase in the past but where the open market rental value is less than the passing rent a falsely inflated tied rental value has been created. This is the sectors Achilles heel. Tenants, at all times, need to take professional advise from a surveying practice or a suitably qualified expert that is on their side and not conflicted with financial relationships with pubcos or brewers.
Fair Pint, along with the IPC and others, is calling for tenants to be offered a genuine free of tie option and we are openly campaigning for reform in a sector which seems to be dominated by large companies and trade representatives behaving as a cartel and suppressing real information about the real problems faced by publicans. The tie isn't the only problem in the sector and to my knowledge no one in FP ever said it was. That said, the beer tie in its various forms has been damaging the licensed sector for many years and in times of much needed change you encounter dinosaur like thinking arguing for the maintenance of an outdated business model for no other reason than that it supports a lifestyle to which a few have become accustomed. There was no need for pubcos and brewers rip off their tenants with unreasonable beer prices that leave their businesses uncompetitive. Sadly they do. The sector isn't able to reform itself Matthew – codes of practice tinkle with the bells and whistles but conveniently avoid the real issues. The industry needs reform and that unlikely to happen without government intervention.
If tenants are now questioning the motives and integrity of organisations such as the FLVA and the BII than that can only be a good thing. For far too long conflicted bodies have waved the flag of a rapidly declining sector whilst ignoring the real cause of that decline. Perhaps now, with groups such as IPC, JFL, Fair Pint and the good work done by the GMB we can begin that much needed reform process.
Steve
Corbett - 15/09/2011 13:34:51
Matthew, thanks for responding.
Your work in helping tenants, I assume for no remuneration, can only be commended. I worry about your qualifications on giving advice at rent review. There are many out there helping tenants in this regard that don't have the expertise or complete understanding of the RICS guidance and the legal terminology contained within the rental valuation document. As you know, it takes many years of study and experience to achieve the level of knowledge required to establish an appropriate rental level and effectively negotiate a suitable conclusion to a review. I've seen examples of 'so called help' at this level where the unqualified rent adviser has, with good intentions, agreed a rent that in no way represents a fair share of the profits of that business but instead is based entirely on what the pub can afford and not what the rent should actually be.
The new rent, agreed by unqualified advisers, becomes the comparable and by default, the benchmark in which all other rents are then incorrectly set. Sadly Matthew, this attempt to help a tenant is one of the single most important factors in the complete demise of a sector as the good intentioned 'helper' unwittingly negotiates an incorrect rental valuation which in turn begins the process in which a whole rental market is distorted.
I'm sure you will agree, ex BDM's helping tenants at review using methods that amount to nothing more than horse trading should be discouraged and hopefully eradicated from a sector that really needs sound professional help at every level. You may of course be a surveyor or have other qualifications that indeed qualify you as an expert in this field and I'm sure you would confirm this before undertaking any work on behalf of tenants in the rent review or lease renewal process. I'm hopeful that Martin Caffrey, ex executive of Enterprise Inns, does the same.
Moving on, I'm saddened that you think I've insulted FLVA members. Looking through my previous post I can see no example of your claim, indeed I see only a factual account of the circumstances to date, all of which can be verified by other IPC members. You mention that you are not in a position to comment on these issues then proceed to give us your unbridled assessment of the inner workings of the FLVA as well as an incorrect opinion of the Fair Pint Campaign. Perhaps you should have taken the time to carry out some real research on your own house and the organisations you criticize before passing comment.
Richard Yates makes an excellent point and I note its one that you have yet to answer. He asks why the FLVA didn't join with the IPC if it is all in favour of supporting tenants through unity? That question is one that remains unanswered by yourself and indeed the FLVA and is one that is right at the heart of whole industry conflict debate. I'm hoping that you can shed some light on the FLVA's reasoning here but I suspect the answer may lie in Solihul and with the senior executives, past and present, of Enterprise Inns,
Finally, your justification on “reaching” members is perplexing to say the least. You imply that the only way to recruit is via the pubcos. Hopefully you can see the difference in recruiting new members that are pubco tenants from tenants whose membership is paid for by their pubco? And if you do, perhaps you can also see that there might be a conflict of interest here as the pubcos may want your organisation to justify their investment in the FLVA. Surely it might have been better to base your recruitment strategy on strength of independent advice rather than rely on a financial “leg up” from those you seek to safeguard your members from? A man more learned than me once said “the right to do something does not mean that doing it is right”
As far as I'm concerned, we are right to question the morals of the FLVA. Not an attack Matthew, just a thought.
Your work in helping tenants, I assume for no remuneration, can only be commended. I worry about your qualifications on giving advice at rent review. There are many out there helping tenants in this regard that don't have the expertise or complete understanding of the RICS guidance and the legal terminology contained within the rental valuation document. As you know, it takes many years of study and experience to achieve the level of knowledge required to establish an appropriate rental level and effectively negotiate a suitable conclusion to a review. I've seen examples of 'so called help' at this level where the unqualified rent adviser has, with good intentions, agreed a rent that in no way represents a fair share of the profits of that business but instead is based entirely on what the pub can afford and not what the rent should actually be.
The new rent, agreed by unqualified advisers, becomes the comparable and by default, the benchmark in which all other rents are then incorrectly set. Sadly Matthew, this attempt to help a tenant is one of the single most important factors in the complete demise of a sector as the good intentioned 'helper' unwittingly negotiates an incorrect rental valuation which in turn begins the process in which a whole rental market is distorted.
I'm sure you will agree, ex BDM's helping tenants at review using methods that amount to nothing more than horse trading should be discouraged and hopefully eradicated from a sector that really needs sound professional help at every level. You may of course be a surveyor or have other qualifications that indeed qualify you as an expert in this field and I'm sure you would confirm this before undertaking any work on behalf of tenants in the rent review or lease renewal process. I'm hopeful that Martin Caffrey, ex executive of Enterprise Inns, does the same.
Moving on, I'm saddened that you think I've insulted FLVA members. Looking through my previous post I can see no example of your claim, indeed I see only a factual account of the circumstances to date, all of which can be verified by other IPC members. You mention that you are not in a position to comment on these issues then proceed to give us your unbridled assessment of the inner workings of the FLVA as well as an incorrect opinion of the Fair Pint Campaign. Perhaps you should have taken the time to carry out some real research on your own house and the organisations you criticize before passing comment.
Richard Yates makes an excellent point and I note its one that you have yet to answer. He asks why the FLVA didn't join with the IPC if it is all in favour of supporting tenants through unity? That question is one that remains unanswered by yourself and indeed the FLVA and is one that is right at the heart of whole industry conflict debate. I'm hoping that you can shed some light on the FLVA's reasoning here but I suspect the answer may lie in Solihul and with the senior executives, past and present, of Enterprise Inns,
Finally, your justification on “reaching” members is perplexing to say the least. You imply that the only way to recruit is via the pubcos. Hopefully you can see the difference in recruiting new members that are pubco tenants from tenants whose membership is paid for by their pubco? And if you do, perhaps you can also see that there might be a conflict of interest here as the pubcos may want your organisation to justify their investment in the FLVA. Surely it might have been better to base your recruitment strategy on strength of independent advice rather than rely on a financial “leg up” from those you seek to safeguard your members from? A man more learned than me once said “the right to do something does not mean that doing it is right”
As far as I'm concerned, we are right to question the morals of the FLVA. Not an attack Matthew, just a thought.
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