Scottish and Newcastle calls time on more pubs as tenanted scene goes flat

Published on Saturday 4 July 2009 14:41

SCOTTISH & Newcastle's struggling tenanted pub company has reacted to the falling British beer market by putting a swathe of pubs on the market.

The move is part of a wider strategy for the group to focus on the outlets it manages for Royal Bank of Scotland and Globe Pub Company. The sale of 20 pubs comes barely three months after Scottish & Newcastle Pub Enterprises (S&NPE) placed 32 public houses on the market. S&N operates more than 2,000 pubs through its S&NPE division but the sector has been decimated by the decline in UK beers sales.

In the UK sales are at their lowest levels in almost 40 years, and there are an average of 36 pubs closing every week.

According to the British Beer & Pub Association, sales of beer in supermarkets and off-licences in the first quarter of the year fell at their fastest rate since the last recession during the early 1990s. Sales dropped 11 per cent and contributed to a 8.2 per cent drop in overall beer sales.

In terms of on-trade, in bars and clubs sales fell 6.3 per cent during the first quarter of the year.

S&NPE property director Chris Moore said: "These are good businesses with proven operators. And we expect this, coupled with their mid market pricing, to make them particularly attractive to local and regional brewers looking to cherry pick pubs in their area."

This year S&N's parent company Heineken bought up nearly a third of the debt in the struggling Globe Pub Company. The Dutch brewing giant bought up 30 per cent of discounted senior bonds in the company, owned by Robert Tchenguiz. Globe has been facing an uncertain future since it breached its banking covenants and defaulted on a 257m loan.

As a result, if holders of 25 per cent of the bonds agree, they can seek the appointment of an administrative receiver to run the business.