Pressure is mounting on Punch Taverns after it emerged that almost one in five of its tenanted public houses is looking for a new licensee.
The pub group’s shares have fallen in recent weeks because of fears over the sustainability of its business model.
Many pub tenants are suffering from a combination of increased competition from supermarkets selling cheap alcohol, the smoking ban, rises in duty and a general decline in beer drinking.
This has prompted some analysts to question whether landlords, including big pub companies such as Punch and Enterprise Inns, are charging too much in rent. Tenanted or leased pub companies make the bulk of their income from charging tenants rent and for beer.
A research note published this month by analysts at Morgan Stanley, the investment bank that is one of the joint brokers to Punch, said: ’The leased-pub business model [is] being sorely tested.’