Capital Pub boss backs competition inquiry into beer ties

The chief executive of Capital Pub Company today called for the business model of the major pub companies to be referred to the Competition Commission.

In May, MPs on the Business and Enterprise Committee slammed the major pub companies and the beer tie - the exclusive purchasing obligations between pubcos and tenants - calling for the tied model to be referred to the competition authorities.

The majority of the pub industry rejected these calls but Capital’s Clive Watson today broke ranks stressing that he was against monopolies in any form.

“I think the balance of power has shifted too much in favour of the large pub companies and away from the tenants,” he told Caterersearch.

“The Competition Commission should definitely get involved and the industry as a whole should get on with reform and make a genuine shift away from the tie.”

Capital was founded by Watson and David Bruce with the specific goal of avoiding leased and tied-pubs after the pair experienced the struggle of making a living working under that business model.

Today it has 25 mainly freehold, free-of-tie, pubs in London, which are predominantly wet-led, although some also offer food.

Unveiling results for the year to 28 March 2009, Watson said Capital remained cautious about its future prospects due to the wider economy.

But he added that the company was in rude health with the entire estate now refurbished, no major capital expenditure planned in the short-term and the London market outperforming the rest of the UK.

Turnover in the year was up 5% to £19.8m (2008: £18.8m). Adjusted pre-tax profit increased 7% to £2.1m.

Capital has set itself the goal of paying down its £29m debt and expected to reduce it to £27m within the next year before looking to further acquisitions.

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By Chris Druce

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