'Pubcos profit margin nine times more than Tesco'

28th May 2009, 2:46pm

A new study from the GMB union has claimed that the pub company Enterprise Inns has a profit margin nine times bigger than supermarket chain Tesco.

The results show that Enterprise's profit margin before tax and interest is 57.3p per pound of turnover compared to Tesco's 5.9p.

The report was discussed at a meeting yesterday (Wednesday 27th May) between GMB General Secretary Paul Kenny and other GMB officers and the National Committee of Fair Pint campaign.

Speaking after the meeting, Paul Kenny, GMB secretary said the findings highlighted a 'rip-off': "The pubcos are yet another example of financial engineering by the City gone wrong. What a rip off. The pubcos will dismiss these figures and say we don't understand how they work. But facts are stubborn things. It is a fact that drinkers in pubco tied pubs are paying 80p more for their pint than in free chains like Wetherspoon to generate these super profits."

A spokesman from Enterprise Inns hit back saying the study is effectively worthless: "Enterprise Inns and Tesco are two totally different businesses. Trying to draw parallels between them is at best ridiculous and at worst deliberately disingenuous. 

"Attempting to make this comparison shows the GMB hasn't got a clue about how the pub industry operates."

But Kenny concluded that it is down to the government to review the pubco model: "It is high time that the Labour Government put an end to the pubco model for the benefit of consumers and tenants alike. The losers will be those sheltering holdings in tax havens – but that is the risk they have run. At the meeting with Fair Pint we discussed the best way to get to this result."

Related Articles:

• 04 Jan 2010 - Pubco tied tenants will ballot for strike action in 2010
• 18 Nov 2009 - Enterprise Inns profits fall by 22% during “very testing year” for pubs
• 14 May 2009 - Unite supports pub beer supply investigation
• 13 May 2009 - MPs call for inquiry into 'beer tie' activity
• 12 May 2009 - 'Survival of the community pub is remarkable'
• 24 Apr 2009 - One size fits all approach is killing our community pubs
• 03 Apr 2009 - Over 1,130 pubs owned by pubcos have closed

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