A byword for problems between pub company and landlords, Inntrepreneur is the artificial creation of the 1991 breweries for pubs swap, engineered by Grand Met with Courage, the subsidiary of Foster's of Australia. Owned jointly by the two giants, Inntrepreneur had 6,100 tenanted pubs: 4,300 tied to sell Courage beer while 1,800 were free of any ties.
Its performance has been bleak. Since 1991, the two parties have had to inject £225 million, largely to cover property asset writedowns of £257 million. Last year, income failed to cover interest costs. Recent restructuring has hived off the non-tied estate into a separate entity, Phoenix Inns, but the remaining tied pubs still carry debt of £800 million.
The poor trading performance cannot be attributed to a failure to work the assets hard. Quite the reverse: Inntrepreneur set high rents for its tenants and until recently, they were fined up to £80 for every barrel falling short of the sales target set down in their leasing agreements.
A move by Inntrepreneur to have its leases exempted from EC law prompted Brussels to suggest to the OFT it might like to look at the prices paid by tied tenants for their beer. Ironically, the cause of the controversy may no longer exist by the time the OFT reports. Courage has indicated it would like to pull out, while Grand Met would like to hang on to the pubs until their tie with Courage runs out in 1998 - when it could take advantage of discounts on the open market, or sell if a buyer came along.
The uncertain future of Inntrepreneur and Phoenix and their thousands of pubs is one of the clouds over the industry. In the event of a breakup, the effect on pub prices could be disastrous.