BELHAVEN owner Greene King warned yesterday that there would be no early respite from the sales hangover the pubs giant has suffered from the tougher new drink‑drive limits in Scotland.
The group, which will become Britain’s biggest managed pubs group after its £774 million agreed takeover of rival Spirit, said the new rules had knocked like-for-like sales in its core business by 0.5 per cent in the first eight weeks of its new financial year.
The Scottish Government launched the crackdown in December, limiting drivers to having 50mg of alcohol in blood, down from 80mg, making it lower than the rest of the UK.
Rooney Anand, Greene King’s chief executive, said: “Our Scottish business suffered in the year from the introduction of a lower drink-driving limit just before Christmas.
“The lower limit has changed consumer behaviour towards drinking out in Scotland and we expect to see continued like-for-like sales weakness, at least in the first full year following its introduction.”
Asked if he felt it was possible the cultural consumer change triggered by the tougher drink drive rules in Scotland could be permanent, Anand said: “I don’t think we can rule that out.
“But I have taken the view that, like with the smoking ban [in pubs], there’s a profound effect at first, but after a while there is a lesser residual effect.”
The Greene King boss said the group – whose managed pub brands include Hungry Horse and Loch Fyne Seafood – had tried various initiatives to address the new challenge, including giving discounts to designated drivers on group nights out at the pubs, improving the non-alcoholic drinks range, and “focusing even more on our food brands than we already do”.
It came as the firm, whose Edinburgh outlets include Milnes, said underlying pre-tax profits fell 2.7 per cent to £168.5m in the year to 3 May, as profit margins came under pressure.
Managed pubs’ like-for-like sales over the year rose 0.4 per cent, net income at its tenanted pubs rose 3.5 per cent, and sales in the brewing division, whose products also include IPA and Abbot Ale, lifted 4.2 per cent.
In the past eight weeks, same-floorspace sales in its managed pubs were up 0.6 per cent, suggesting they would have been up more than 1 per cent but for the Scottish impact. Net income in Greene King’s leased pubs rose 1.2 per cent.
It said brewing volumes were 3.7 per cent lower due to tough comparatives and a year-on-year delay in the timing of export sales. The total dividend rises 4.8 per cent to 29.75p, courtesy of a 21.8p final payment.
After the Spirit takeover, Greene King will have some 3,000 outlets, including about 300 in Scotland.