Eight pubs look destined to close forever as their billionaire Tory donors demanded the tenants pay full rent owed from the months during the coronavirus lockdowns.
The Wellington Pub Company offered its estimated 850 landlords a Covid discount on condition they extended their leases for five years.
Around 250 of these tenants formed a pressure group, led by Nick Holden and Kate Ahrens of the Geese and Fountain pub in Croxton Kerrial, Lincolnshire, to take on Wellington Pub Company.
The firm is owned by David and Simon Reuben, named as the second richest family in the UK in by the Sunday Times Rich List in May 2020 - at a time when large swathes of the country was unable to earn money due to the pandemic.
Geese and Fountain, as it stands, will close permanently on Monday. Seven others are feared to have to follow suit due to the demands of the Reuben brothers, whose net worth is reportedly £16 billion.
These tenants refused the company’s deal, and arbitrators have now ruled many of them will have to pay rent in full.
Mr Holden said: "To say we are devastated is an understatement. The Geese and Fountain has been our home, our business, our whole lives for the past eight years.
"We have poured thousands of pounds of our own money, and that of our families, into this place, because we loved it, and we wanted it to succeed.
"But another fight with Wellington, coming on top of three of the most difficult years in the pub trade and with rising energy costs and inflation running rampant, is one we cannot hope to win. We have to accept defeat. The billionaires have won."
Paul Michelmore, a sole trader and licensee of the Harrison in King’s Cross, London, was told he must pay £99,086.12 in rent, according to The Guardian.
He said the arbitrator had made factual errors and had confused profits with turnover, saying in the decision that he could afford to pay an extra £5,000 a month to pay back the pandemic rent.
The landlord said: "We make about £30,000 profit a year.
"And with inflation, our costs have skyrocketed."
Mr Michelmore's award-winning pub has become a huge part of London’s folk music scene.
It'll have to shut within weeks if he loses his appeal against the arbitrator’s decision, work that will cost an estimated £50,000 in legal fees. He is raising funds to appeal, and donations can be given here.
"The decision I was faced with [after the arbitration decision] was that if I folded the pub, my debts would be limited to about £150,000 so they probably wouldn’t go after my home," the tenant told The Guardian.
Wellington Pub Company, which is part of Criterion Asset Management, did not respond to a request for comment last week.
Pubs and restaurants across England were forced to shut from March to September 2020, due to the pandemic.
They then faced further closures in local lockdowns until May 2021.
Some pub companies with tied tenants – who must get their beer from that company – are governed by the Pubs Code, and they waived rents for large periods of the lockdowns.
Independent pubs, though, have commercial landlords, who are not regulated.
A spokesperson for Wellington Pub Company (WPC) said: "Pre-pandemic, the tenant at Geese and Fountain had arrears. During Covid, the tenant was offered a generous concession, which they chose not to accept.
"The tenant then chose to go to arbitration, and the arbitrator noted in their award that WPC had offered to 'share the burden caused by the pandemic' and based on the business at the pub, did not find grounds to relieve the Tenant from paying the arrears. The independent arbitrator noted in their award that the tenant was also not 'up to date with its post pandemic rent' which could ultimately call into question the ability of the Tenant to run a viable business."
Regarding Harrison Arms, the spokesperson said: "This is a Central London pub that is trading well and in our opinion, unlikely to close. The tenant lives in Portugal and employs a management team to run the pub. Again, he chose to go to arbitration, the result of which saw the arbitrators state he had 19 months to pay the accrued arrears. The tenant did not agree with the award and has chosen to go to appeal which is ongoing. The published award stated that bank statements provided by the tenant 'do not fully and accurately reveal the financial position of the business' and in addition, the claimant (the tenant) admitted 'to regularly and intentionally manipulating the bank balances of the business.' The arbitrator also commented that sales are shown to have bounced back after the pandemic….and the business is 'now trading at a much-improved level in terms of sales as compared even with before the pandemic.'
"WPC provided extensive support to its tenants throughout the pandemic, and even before the Code of Conduct was published by the Government. WPC received many comments of thanks from its tenants for the support received, as well as from Members of Parliament. Unfortunately, a vocal minority have tried to discredit Wellington’s efforts and use the media to promulgate a story which suits their interests, without respect for the full facts."
