Young guns are the inn crowd

Britain's pubs are passing from the hands of the old order, writes Dan Gledhill

When the die was cast, Giles Thorley was a 21-year-old undergraduate studying prop-erty. Ted Tuppen, a 36-year old accountant by training, was looking for a new career to cut out the travelling necessitated by his engineering business. Hugh Osmond was a 27-year-old medical graduate growing bored of his computer software venture.

Ten years after the 1989 Beer Orders, the act that forced the big brewing families to put 11,000 of their premises on the market, these three men between them control almost 8,000 pubs and have designs on thousands more. They are part of a brat pack of maverick landlords, whose innovations have overturned centuries of tradition - causing historic publicans like Bass, Allied Domecq and Scottish & Newcastle to reinvent their businesses.

Tuppen runs Enterprise Inns, a quoted company with 2,270 pubs around the country. Thorley's Unique Pub Company has 2,614 premises.

Osmond works for Punch Taverns, a privately owned operator with 1,800 establishments. He is battling to make Punch the nation's biggest landlord by securing the 3,600 pubs that Allied Domecq has put up for sale. Osmond's ambition has brought him head-to-head with the beer establishment (the beerage) in the shape of Whitbread, which last week announced a deal to buy the Allied estate.

While the likes of Thorley, Tuppen and Osmond have spent the last few years gobbling up unwanted pubs, the aristocrats of brewing have been busily spewing them out. Allied Domecq, formerly Allied Lyons, is the latest of the big names to signal its retreat. The Beer Orders limited Bass's estate to under 4,700 outlets, prompting the company to indicate that its future lies in hotels. With Greenalls also slimming its portfolio, Whitbread's fight for the Allied estate represents the beerage's last stand against upstarts like Osmond.

The idea of entering the pub trade first entered Tuppen's mind 10 years ago when he realised the implications of the Beer Orders.

Lord Young, then the Conservative Secretary of State for Trade and Industry, had decided to act in response to growing complaints about the power of the big six brewers - Allied Lyons, Bass, Courage, Grand Metropolitan, Scottish & Newcastle and Whitbread. Their control of the nation's pubs was cemented by the tied-house system, which provided them with a guaranteed outlet for their beer. This concentration of power had accelerated in the 1980s, as several regional brewing families, notably the Farrs of Nottingham and the Ruddles of Oakham, were swallowed up.

The Government's solution was to put a ceiling on the number of outlets each brewer was permitted to own.

"All of a sudden, Lord Young was putting 11,000 pubs on the market, which would have to be sold within three years," says Tuppen. "I thought that there has to be a business here."

On graduating, Giles Thorley had planned a career at the Bar - the legal variety, that is. Instead he joined Nomura, under the tutelage of the now-legendary principal financier, Guy Hands. Nomura had just taken charge of 1,800 pubs with the acquisition of Phoenix Inns, and Thorley was assigned to look after them in a venture since named the Unique Pub Company.

"My main love is property," he says. "I saw pubs as property assets."

Nomura has continued to acquire pubs, most recently the 1,241 it acquired last year from Greenalls. More than any other, this deal represented the changing of the pub guard. Greenalls is still chaired by Lord Daresbury, Eton-educated scion of the Warrington-based brewing family. Hands, by contrast, learned his trade at Goldman Sachs, the US investment bank.

Osmond made his fortune with the flotation of Pizza Express before turning his attention to Britain's pubs.

"While cinemas and restaurants have become centres of entertainment, the majority of publicans haven't got the message. There are a few of us interested in changing that," he says.

Osmond approached Allied Domecq last month with a proposal to buy its pub estate. The following week, Allied revealed it was in exclusive talks to sell to Whitbread, its long-standing ally. No wonder he feels a kindred spirit with fellow upstarts Tuppen and Thorley.

"Ted, Giles and I come from outside the industry, and we often get together to moan about the brewers," he says. "They have run the industry in the same way for hundreds of years, so the arrival of new people and new ideas must be a good thing."

Whitbread has been running down its pub estate since the early 1970s. A portfolio which once boasted 12,000 outlets had almost halved by 1989 with the demise of many inner-city locals. The stipulations of the Beer Orders forced the disposal of another 2,000 and by this year Whitbread's estate was down to 3,900.

But with the disclosure that Allied Domecq's under-invested estate was available, Whitbread spotted the chance to revive its estate and get out of brewing - a move necessitated by the Beer Orders.

Meanwhile, Osmond, aware that institutional investors have developed an aversion to small companies, is determined to create a business large enough for a successful flotation and has the whole-hearted backing of Texas Pacific, the US buy-out specialist which has just taken a 70 per cent stake in Punch.

Thorley and Tuppen are on the lookout for acquisitions, as is John Sands, managing director of Hartlepool-based Pubmaster. And John Moulton, the deal-maker who heads venture capitalist Alchemy, is expected to announce a bid for Inn Business.

Britain's brat pack of pub landlords is on the move - unless, of course, the Government decides the nouveau beerage deserves the same fate as the original.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee