Oxfordshire pub chain under fire for ‘unfair’ treatment of landlords

Stonegate Group, which runs Slug and Lettuce by Oxford Castle and the City Arms on Cowley Road, is facing an investigation by the the Pubs Code Adjudicator.

It is alleged that the firm ‘unfairly’ treated landlords running over 3,000 of its venues.

Landlords lease the properties in exchange for reduced rents and additional perks, but now Stonegate stands accused of failing to provide accurate information regarding necessary repairs, which could impact publicans’ business profitability.

Stonegate is also being investigated for potentially not calculating the correct rent to demand from publicans.

The conduct of Stonegate’s business development managers, responsible for communication between the company and its tenants, is also being examined over apprehensions of improper recording of interactions and possible unfair treatment of tenants.

The PCA’s investigation will also determine if it received all necessary information from Stonegate on alleged breaches.

The company owns over 4,000 bars and clubs across the UK including more than 3,000 tenanted and leased pubs and eight venues in Oxfordshire.

These include Zinc and Fever and the Dog & Gun in Banbury, as well as The Lamb Inn in Bicester, Broadways in Didcot and Thame’s Birdcage Inn.

Several managed brands, such as Walkabout and Be At One pubs, do not fall under the investigation.

The City Arms pub in Oxford (Image: NQ)

The probe could see the company fined up to 1% of its annual revenue, equating to a maximum penalty of over £16 million, if found in breach of the pubs code.

Fiona Dickie, the pubs code adjudicator (PCA), revealed ongoing discussions with Stonegate over a “small number” of cases but signalled awareness of further complaints.

The code is designed to regulate the sometimes complicated dynamics between pub-owning companies and generally ‘tied’ tenants.

Rents are based on profit forecasts, and the PCA is probing issues including Stonegate’s provision of “realistic and evidenced financial forecasts”.

Broadways in Didcot (Image: Broadways)

It was revelaed earlier this year that the company had sold over 100 pubs recently.

The major Oxfordshire pub owner appointed a restructuring firm in January as it considered a £1 billion sale of its premises.

In recent financial results, Stonegate recorded a revenue decrease of £128 million to £1.62 billion, capturing an overall pre-tax loss of £174 million.

Speaking to  The Drinks Business  last year, the chain said that it is “looking at options” for around 1,000 leased and tenanted pubs.

These options could include “a refinancing, partial sale, or full sale” although it said no decisions had yet been made.