Marston’s first introduced the Retail Agreement to Marston’s  Pub Company, its tenanted and leased estate, in 2009 to address the challenging market conditions it faced in its tenanted estate. In particular the Agreement was aimed at wet-led community pubs and fair play to Marston’s because they started first with their basket cases.

Under the Agreement Marston’s Pub Company has responsibility for the retail offer, including drinks brands sold, food menus and retail standards. The “franchisee” earns a percentage of revenue and is responsible for staff costs. Marston’s Pub Company is responsible for all other costs. (more…)

The term “irrational exuberance” derives from words that Alan Greenspan, then chairman of the Federal Reserve used in a black-tie dinner speech in 1996. Fourteen pages into this speech, he posed a rhetorical question: “But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions ……………………..?”

Immediately after he said this, stock markets worldwide tumbled in value. 

The term irrational exuberance became Greenspan’s most famous quote, out of all the millions of words he had uttered publicly and the term is now often used to describe a heightened state of speculative fever. I have chosen this phrase as the title for my post because many people will know instantly from this title what this post will be about. (more…)

With apologies to Blackadder.

Further to my post, Giles Thorley (ex Punch) to steer clear of pubs at TDR Capital, I hear that Punch Taverns is coming under increasing fire to reduce and quickly, its debts of  close to £3.2bn.

The new chief executive, Ian Dyson, a former finance director at Marks & Spencer, who replaced good old Giles has promised a strategic review of the company, which is due sometime in February but it looks increasingly likely he may not be given the time as investors are becoming impatient about the lack of progress at the firm, which lost £160m last year.

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The above recent headline in The Publican brought a wry smile to my face as the ex Punch Taverns CE Thorley said  he won’t get involved in this private equity firm’s Stonegate Pub Company.

Despite his history with the on-trade Thorley, who left Punch last year after nearly a decade as chief executive, said he is joining the firm as a senior adviser to help on a variety of deals, but won’t get stuck into the on-trade again. Yes right!!

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If an industry is seeing a decline in demand of circa 8% per annum in its product, is suffering from excess supply of that product and there are many suppliers of the product, what would normally happen to the general price level of that product?

The answer is pretty straightforward — the price would go down. Is there any industry where this general fact does not apply? Well, only one — it’s the wholesale price of beer in the UK.

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