BW selling off its pubs

Published: Monday, 13 September 2010

BRITISH Waterways has called time on its joint venture with pub chain giant Scottish & Newcastle with news that up to twenty pubs will be sold off, writes Allan Richards.

The majority of pubs will be sold via agents Colliers International. Whilst Scottish & Newcastle are keen to dismiss suggestions that the partnership has ended, no announcement has been made regarding its future.

Joint Venture

The joint venture was set up with Scottish & Newcastle Pub Enterprises in 2005 with its first pub, the Foxton Locks Inn (pictured) opening in May of that year on the Leicester branch of the Grand Union Canal amid much publicity. The longer term intention was to create a lucrative chain of up to 100 waterside pubs.

Despite the confirmed sell-off, BW's web site still states 'The Waterside Pub Partnership continues to develop and acquire further establishments, with British Waterways' share of the profits re-invested into maintaining and improving our canals and rivers.'

No longer true

Obviously the first part of this statement is no longer true! However, it is the second part of the statement that is intriguing. Why are these pubs being sold off if the profits from them are being used to maintain our canals?

In 2008/9 BW forecast a contribution of just over £200,000 from the pub partnership. Indeed, Executive Director, Vince Moran, was set a target based on this figure. Quite why BW thought it necessary to divert its operation director from his task of maintaining our canals is unknown, as is his achievement against target.

One thing is certain, based on that forecast, the pub partnership is not profitable enough. Indeed, it is very possible that BW's forecast was inspirational rather than realistic and the pub partnership has never contributed to maintaining the canals.

Debts of £22 millions

Selling twenty pubs will raise millions but will our canals and rivers benefit from the sell-off? Almost certainly not! The partnership has debts of over £22 millions.

Perhaps chairman, Tony Hales, should have warned BW about the profitability of pub chains. In 1999 he was ousted by fellow directors from his job as chief executive of drinks and pub giant Allied Domeq, largely for his inability to make its pub division profitable.