Bass plans to sell 400 pubs
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Your support makes all the difference.BASS, Britain's largest brewer, has earmarked nearly a tenth of all its public houses for sale in a pounds 100m clear-out.
The company has targeted 400 'low barrelage' pubs out of a total portfolio of just over 4,500.
A source within Bass Taverns said Bass wanted to get rid of the pubs 'with an indecent haste'. Regional managers in the brewer were being told that 'anything that is underperforming should be shifted', he added.
Bob Cartwright, Bass's head of corporate affairs, would not confirm the number but said that a large number of pubs had been identified for 'churning'. The number is much higher than the traditional churn - Bass tends to sell around 100 pubs a year.
It is understood that the sales are part of a refocusing operation, aimed at improving returns from the company's public house estate, which comprises 1,500 leased inns and 3,000 managed houses. At present it produces a paltry average return of about 7 per cent.
The move comes on top of the 2,740 pubs that Bass has already sold to comply with the Monopolies and Mergers Commission report on the brewing industry in 1989.
A senior brewing analyst said he had been told by Bass executives that the company now wished to focus on 'leisure related outlets' and to that end Bass would be building around 150 new pubs in the next year or so.
The brewer is conscious that its main rivals, Whitbread and Allied Breweries, have been able to boost the profitability of under-performing pubs by selling food. Bass's efforts with food has not been so successful, and it is now focusing on strengths such as racing and bingo (it owns the Coral chain) and hotels (Holiday Inn).
It is hoping to raise as much as pounds 100m from the disposals, although there is likely to be a limited market for the pubs, which tend to sell less than 250 barrels of beer a week.
The most probable purchasers are the new brand of pub entrepreneurs, backed by venture capital firms, who have already snapped up parts of the chains sold by Bass, Whitbread and Allied.
But one venture capitalist said pubs were 'bid, not offered' in the market. He commented that most venture funds interested in pubs had bought out as many as they could take and were worried about how they would get their money back.
(Photograph omitted)
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