Foster confirms move to Inntrepreneur
Tuesday 25 July 1995
Inntrepreneur has 4,330 pubs and is jointly owned by Grand Metropolitan and Foster's Brewing of Australia, which is selling Courage for pounds 425m.
Drinks industry analysts said they would be surprised if hundreds, if not a couple of thousand pubs from the Inntrepreneur stable were not eventually sold to reduce the company to a more manageable size.
They added, however, that it would be difficult to achieve good prices on pubs because of the unattractive and potentially prohibitive 20-year Inntrepreneur leases that most of the landlords are locked into.
One industry observer said that Ushers Brewery, which itself was sold off from Courage and which had to abandon a flotation on the stock market last year, was a likely buyer of Inntrepreneur pubs.
Ushers is virtually a forced buyer because an agreement to brew beer for Courage is starting to wind down. The company will soon be in a position of being able to produce considerably more pints than it can sell.
Mr Foster, who has worked for Courage for 12 years and been chairman since 1992, refused to be drawn on his strategic ideas from elevating Inntrepreneur from a company beset by controversy to one that can compete effectively with the big pub-owning breweries.
"It is too early to talk about structure and where we end up. There are a wealth of things to be evaluated," said Mr Foster.
One of the main things to be evaluated is how to placate hundreds of landlords who are taking legal action over the terms of their leases which, they claim, are financially unworkable and breach European law.
Brian Jacobs, financial adviser to dozens of Inntrepreneur tenants and author of the book Pub Lease Rent Reviews, said Mr Foster faced an almost impossible task.
"I wish him luck, but luck isn't going to change Inntrepreneur's spots. What can he change? The management is landlocked by the 20-year leases. They can only bust it up," he said.
Several parcels of pubs have already been hived off from Inntrepreneur, which once boasted an estate stretching to more than 6,000 pubs.
The main problem now is how to reshape the group in a radpidly changing industry, fast heading towards consolidation. The Inntrepreneur estate is roughly the same size as Bass's and much bigger than the 2,800 pubs owned by S&N, which will become the UK's largest brewer when it acquires Courage.
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