The UK’s largest pubs group has agreed to help tenants pay rents following widespread criticism that the industry is leaving publicans in the lurch during the Covid-19 lockdown.
Ei Group – formerly known as Enterprise Inns – has said that any of its more than 4,000 pubs that are not receiving government grants will get a three-month “rent credit”, amounting to a discount on future payments.
Those receiving grants of £10,000 or £25,000 will be given credit on future stock purchase, to the value of either 50% or 75% of the value of rents for the period.
A group of 60 MPs had earlier urged Ei Group to give publicans a rent-free period to keep them afloat, as the industry wrestles with a crisis that threatens to put thousands of pubs out of business.
MPs from both sides of the House of Commons had singled out the company for particular criticism, saying they were “dismayed” it had agreed only to defer rents rather than offering a rent holiday.
“This will put many tenants deep in debt, making it financially more difficult for them to reopen,” the MPs said in a letter to the company.
The Guardian understands that Ei Group was working on the rent credit proposal when it received the letter.
Greg Mulholland, chair of the British Pub Confederation, said Ei’s proposal was a “clever ruse” that still meant charging rent on closed pubs.
He added that credit on future stock purchases was an easy sacrifice for Ei to make given that pubcos typically charge huge markups on the beer they sell tenants.
Ei’s offer followed an outcry from publicans at being charged rent during the lockdown, with the groundswell of anger prompting two warnings from the government’s Pubs Code Adjudicator (PCA) to companies who it said should do more to help tenants.
The PCA oversees the relationship between large pub companies and tenants subject to the controversial “beer tie”, under which they buy their beer from the company in exchange – supposedly – for lower rents.
Of the UK’s “big six” pub companies, only Admiral Taverns had already agreed to a rent-free period for tied tenants.
Some other rivals have said they will agree reductions on a case-by-case basis with individual pubs.