Pitcher and Piano owner Marston’s has struck a deal to operate all 156 pubs run by Wales’ biggest brewer and pub company Brains, safeguarding 1,300 jobs in the process.
It said Brains has been under ‘significant financial pressure’ in recent months due to Covid restrictions, and that the deal addresses its ‘immediate funding requirements’.
Brains, a family business founded in 1882 in Cardiff, closed down all its pubs on 4 December after a ban on alcohol sales and enforced 6pm closing across the region.
Brains operates 156 pubs in Wales, including the Vivian pub in Swansea
Brains’ chairman John Rhys said that the company had not taken the decision lightly, but that the deal would allow it to recapitalise its balance sheet and protect its independence.
‘We know and trust Marston’s to be excellent custodians of our pubs and, whilst this is not a decision we have taken lightly, we are confident that both our pubs – and our pubs teams – will thrive under their stewardship,’ he said.
The deal will see Martson’s operate 141 freehold pubs on a leasehold basis, with the majority on long lease agreements of 25 years, while the other 15 short-leased pubs will be run on a management contract basis for a period of two years.
The pubs will continue to be run under the Brains brand, and will still sell the Welsh brewer’s beer.
Before the pandemic, Brains’ pubs made £14million a year in core earnings.
Brains also operates the City Arms pub in Cardiff
Deal: Marston’s said operating the pubs and paying the wages of Brains’ 1,300 staff will cost it £2m
Martson’s, which has also been struggling due to Covid and recently unveiled a £400million annual loss, said operating the pubs and paying the wages of Brains’ 1,300 staff will cost it £2million.
The deal, which is expected to be completed in February, will add to Marston’s 1,368 pubs around the UK.
The annual rent on pubs will be £5.5million, payable from April next year.
Investors in Marston’s seem to have welcomed the deal as shares jumped 8 per cent to 74.45p in morning trading on Wednesday.
Prince William visited the Brains Brewery in March last year before attending the Wales v Ireland Six Nations Match as Patron of the Welsh Rugby Union
Martson’s chief executive, Ralph Findlay, said: ‘This transaction is entirely consistent with Marston’s long-term strategy as a focused pub operator and strengthens our representation in South and West Wales, whilst protecting the heritage and independence of an iconic Welsh business.
‘These high quality pubs are a great fit with our existing estate and will benefit from Marston’s scale and operational expertise to further unlock their excellent long-term potential.
‘We look forward to the pub teams joining us and to welcoming guests and the communities which they serve, back into these pubs as the country emerges from the pandemic over the weeks and months ahead.’