Cheers! Marston’s comes to the rescue of rival Brains, saving 1,300 jobs as lockdowns push Welsh brewer to brink
Marston’s has rescued 1,300 jobs after striking a deal to take on more than 150 pubs in Wales.
The future of 139-year-old rival SA Brain & Co had been thrown into doubt by a series of stringent lockdowns in Wales, forcing it to take ‘drastic action’ to survive.
Marston’s, a FTSE 250 pub group, will take on the leases of 141 pubs for 25 years and pay £5.5million per year in rent to Brains.
Drink to that: Marston’s, a FTSE 250 pub group, will take on the leases of 141 Brains pubs for 25 years and pay £5.5m per year in rent
The Cardiff group, which has been owned by the same family for 139 years, was forced to close its doors from December 4 as the Welsh Government banned the sale of alcohol in pubs and enforced a 6pm curfew.
Chairman John Rhys, great-grandson of founder Samuel Brain, said the deal would safeguard Wales’s biggest brewer and hospitality business as an independent business for ‘generations to come’.
He said: ‘We know and trust Marston’s to be excellent custodians of our pubs and, whilst this is not a decision we have taken lightly, we are confident that both our pubs and teams will thrive.’
Marston’s will take on the 141 pubs under the Brains brand on 25-year leases, while a further 15 will be run under management contracts. Brains will retain the freeholds to the pubs as well as its brewing business.
Marston’s boss Ralph Findlay hailed the ‘iconic brand’, which adds to its estate of 1,400 pubs, including 106 in Wales.
He said: ‘Lockdowns and restrictions have been very difficult for the sector and Brains had been quite public, saying it had put them under immense financial pressure.
‘They would have been in a difficult situation. We’ve been able to give a more positive outlook.’
The pubs were taking £14million in earnings before the pandemic, and analysts estimate Marston’s earnings will benefit by £8million by 2023 thanks to the deal. Its shares rose 8.6 per cent, or 5.9p to 74.8p.
The hospitality sector is experiencing the bleakest Christmas in its history with tens of thousands of businesses forced to shut in their busiest period. New restrictions from Boxing Day will mean that 24m people in England, or 43 per cent of the population, will be in Tier 4.
An extra 4m people will go into Tier 3, taking the total to 25m.
Thousands more businesses heading into tiers 3 and 4 in counties such as Suffolk and Northamptonshire must close.
Nik Antona, chairman of the Campaign for Real Ale, said: ‘It’s clear there has not been enough support to protect even a well-established business such as Brains. This could be the first of many hospitality businesses to take drastic action to survive.’
Britain’s biggest hospitality business Whitbread, the owner of Holiday Inn and Brewers Fayre pubs, has asked its landlords for a 50 per cent rent cut for the next three months, as it expects there to be a reduction in demand.
Data from consultants CGA and UK Hospitality showed eight in ten venues – 74,000 businesses – had closed even before the new restrictions were announced. Sales fell by close to two-thirds between December 13 and 19.