A pub landlord company owned by billionaire Tory donors has been accused of pushing pubs into bankruptcy after demanding tenants pay full rent owed from the months during the Covid lockdowns.
The Wellington Pub Company, owned by David and Simon Reuben, offered its estimated 850 tenants a Covid discount on condition that they extended their leases for five years.
To take on Wellington, about 250 tenants formed a pressure group led by Nick Holden and Kate Ahrens of the Geese and Fountain pub in Croxton Kerrial near Grantham in Lincolnshire. These tenants refused the company’s deal, and arbitrators have now ruled that many of them will have to pay rent in full.
As a result, the Geese and Fountain would close permanently on Monday Holden said, describing it as one of the “many victims of a combination of the UK’s exceptional economic collapse and a failure to support businesses trying to recover from the Covid pandemic”.
“To say we are devastated is an understatement,” he said in a statement. “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. 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. “We make about £30,000 profit a year,” he said. “And with inflation, our costs have skyrocketed.”
Michelmore, whose award-winning pub has become a major part of London’s folk music scene, hosting performances by musicians from Peggy Seeger to Bonobo, is planning to appeal against the arbitrator’s decision, and has been raising money to contribute to the estimated £50,000 legal fees.
“As a sole trader, I have no protection whatsoever,” he said. “If I lose, we’ll be closing six to eight weeks after the judgment. 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.” If the appeal is lost, he would be liable to lose his home too.
Michelmore said Wellington had an incentive to push him into bankruptcy because it would be able to capitalise on improvements he had made to the Harrison by charging higher rent to a new tenant.
Wellington Pub Company, which is part of Criterion Asset Management, did not respond to a request for comment last week.
During the pandemic, pubs and restaurants across England were forced to shut from March to September 2020, 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. But independent pubs have commercial landlords who are not regulated. With retailers and restaurants also facing similar issues, in March 2022 Boris Johnson’s government passed a law giving tenants a six-month window to ask an arbitrator to decide how much rent owed during the pandemic should be paid.
“Businesses are continuing to fail as court judgments find in favour of absentee, super-rich landlords,” said Gareth Epps, co-founder of the Protect Pubs campaign group. “The government simply looks the other way.
“A fast investigation is needed to put the legislation back on track and stop people like the Reuben brothers exploiting the pandemic.”
Chris Wright, of the Pubs Advisory Service, said that he had assisted dozens of pubs and other hospitality businesses who had gone to arbitration.
“Some of the decisions have been nonsensical,” he said. “I’ve got publicans who had 100% written off and people with the opposite who have to pay everything – and the cases were the same. There was no difference between them.”
