Pubs in pain

Six month shutdown ‘catastrophic’ for hotels Six months of pubs with no patrons, beer or parmas will be catastrophic for publicans, staff and the industry’s chance of bouncing back from the coronavirus, which has also killed off a $100 million transaction for St Kilda’s Espy and seven other gastro pubs.

Australian Venue Company chief executive Paul Waterson has joined calls from business leaders for federal and state governments to provide a clear pathway out of lockdown, saying it is needed for the industry’s survival.

Mr Waterson also confirmed a deal to buy St Kilda’s Esplanade Hotel and seven other popular Melbourne gastro pubs was on ice.

‘‘If they are talking about a September reopening for our industry, you tell me whether BHP, Telstra or the Commonwealth Bank could survive zero revenue for six months with essentially 12 hours’ notice. I mean, in any industry, it’s catastrophic,’’ he said.

Australia should follow the New Zealand model with clear guidance on each alert level and when each level would be reviewed. The government’s Jobkeeper package was a ‘‘wonderful, brilliant initiative’’ but New Zealand’s kind of guidance to business was ‘‘incredibly important’’.

‘‘We need to get people back to work as soon as it is safe to do so,’’ Mr Waterson said after his group stood down 4500 staff. ‘‘We just want clarity, visibility and time to plan.’’

The pub group, which operates 170 hotels, was within days of settling a $100 million plus transaction with Melbourne-based Sand Hill Road group for its string of city gastro pubs, including St Kilda’s famed Esplanade Hotel, when the government ordered all pubs shut, killing the deal.

‘‘When it became clear that the venues were closing, we had a discussion with the Sand Hill Road team and we agreed, in the current environment, it just wasn’t the right time to finalise a transaction,’’ Mr Waterson said.

‘‘Once we get through the other side of this, if they do want to still sell those venues we’re very keen to keep talking with them,’’ he said.

Sand Hill Road is fronted by brothers Andy and Matt Mullins and two other partners.

They are not the only hotel group struggling with the uncertainty.

Pub landlord ALE Property (LEP), which also had most of its venues abruptly shut in March, on Monday sought to refinance its debt with a new $250 million facility that will roll up all its maturing debt from the 2021 financial year.

Mr Waterson said Australian Venue Company, backed by New York private equity giant KKR, was ‘‘well capitalised’’.

Before COVID-19 struck, Australian Venue Company was on track to turn over $700 million in revenue this financial year with about $100 million in annual earnings before interest, tax and depreciation.

‘‘That’s kind of been steamrolled,’’ he said.

Last year the company bought a slice of Coles’ pub empire.