Glass half empty as pub chains fail after smoking bans

More than a few people are surprised at the silly millions pubs are selling for. But could it be that they are overpriced now with interest rates peaking at over 9 per cent? Already the smoking ban is taking it’s toll – recently The Gin Palace’s Vernon Chalker said his takings dropped over 20 per cent after the ban. Luckily he had the foresight to open Madame Brussels with its vast outside terrace for smoking.

Now Crikey! reports on major banks about to take a $1 billion hit from flaky pub lending. That’s in the same week that The Independent in London reported on the Laurel Pub Company, the one behind the Slug and Lettuce and other well known brands went into administration. That’s a chain of 388 pubs on the brink all affected by the UK’s smoking ban. As the Independent says:

“According to the British Beer and Pubs Association, the smoking ban in England and Wales combined with the credit crunch and a decline in drinking are responsible for closing pubs at their fastest rate in history – 27 a week.
The Massive Pub Company, which owned the Tup chain of pubs in London and the Sports Café chain, have both been placed in administration, while Regents Inns, owner of the Walkabout chain, has been forced into the sale of 94 bars.
In the past two months, Marstons, Greene King, Fuller, Smith and Turner and Wetherspoons have all announced their profits have been hit by the ban on smoking in public.”

I’ve noticed more than a few well known and loved local institutions feeling a bit more than empty at peak times. Crikey! says that National Leisure and Gaming Ltd and Hedley Leisure and Gaming Property Fund are wobbly thanks to smoking bans, increased food and staff costs, high interest rates and a falling numbers of pokies:

“The crazy days of greedy publicans living high on the hog and borrowing to the hilt to enjoy their exotic lifestyles are well and truly over.”