The UK's largest pub and bar operator, Stonegate Group, is facing a statutory investigation by the Pubs Code Adjudicator (PCA) over allegations of 'unfair' treatment of landlords who lease its establishments. The probe centres on more than 3,000 leased venues across the country, with the PCA seeking to determine whether Stonegate has breached provisions of the pubs code.
Fiona Dickie, the Pubs Code Adjudicator, stated that her office has 'reasonable grounds' to suspect Stonegate has failed to comply with the pubs code. The investigation will focus on Stonegate's tenanted and leased pubs, excluding its directly managed venues.
Key areas under scrutiny include alleged discrepancies in information provided by Stonegate regarding required repairs, which could significantly impact a publican's ability to operate profitably. The PCA is also examining potential miscalculations of rents demanded from publicans, with concerns raised about whether Stonegate provided 'realistic and evidenced financial forecasts' used to determine these rental figures.
The investigation comes amidst significant dissatisfaction among Stonegate's tenants, as revealed by a recent PCA survey. With a landlord satisfaction rating of just 43%, Stonegate ranked lowest among its peers, including Admiral Taverns (79%), Greene King (78%), and Punch Pubs (61%).
Stonegate has pledged full cooperation with the investigation, stating it is 'fully committed to complying with the code and ensuring all publicans are treated fairly'. However, if found in breach of the code, Stonegate could face a substantial fine of up to 1% of its revenue, which could exceed £16 million based on recent financial reports. The company, owned by private equity firm TDR Capital, reported adjusted earnings of £201 million in the first half of this year.