Vianet Share Discussion Threads

[norbert colon] 05/7/2013 17:36

I have added today anyway on basis of same rationale Paul.

Happy to hold and wait.

[paulypilot] 05/7/2013 17:28

Hi,

I think with the dividend being maintained, and now a £20k Director buy, the company is signalling that they expect to beat off this regulatory threat, and indeed they said so explicitly in the last RNS:


Government's proposed Statutory Code for Pub companies
On 22 April 2013 the Secretary of State for Business, Vince Cable, released a draft consultation document (the "Consultation Document") for a Statutory Code for Pub Companies regarding their dealing with tenants. Contained within the Consultation Document are provisions for controlling the application of beer flow monitoring for managing compliance with contracted beer purchase obligations.

The Group believes these proposals are unjust and that they are not based upon fact or any substantiated evidence. As such the Board intends to formally respond to the Secretary of State to reject the proposals regarding beer flow monitoring and to support the continued legal use of beer monitoring products and services.

The reason given by the Consultation Document for proposing a limitation on the use of beer flow monitoring product is that it is considered 'controversial' by certain parties who have made unproven accusations against our technology.

Vianet's service has been subject to legal scrutiny by the court of law on many occasions and has never been shown to be unfit for purpose and accordingly as a Board, we are extremely disappointed and frustrated by the proposals contained within the Consultation Document.

Supported by strong legal advice from leading counsel we will be responding to the Consultation Document in order to robustly defend the Group's beer monitoring product. We will respond by 14 June 2013 when the Consultation period is due to end. Although, at this stage, the Consultation Document only contains proposals the Board believes that if these proposals were to be implemented into legislation they would likely have a detrimental effect on the Company's business and therefore the Board is prepared to challenge these proposals as forcibly as necessary to prevent them being enacted into legislation. It is somewhat ironic that the measures proposed by the government will reduce transparency in the landlord - lessee relationship, increase the risk to HMRC tax revenues, and undermine beer quality for drinkers.

The Board looks forward to the Government exercising proper due diligence and reviewing the facts and evidence in this consultation and anticipates that if it does so, the proposals will be amended satisfactorily.


Regards, Paul.

[jeffian] 05/7/2013 17:13

And again by the CEO. With the same result.

[jeffian] 02/7/2013 15:39

....not that it's doing much good!

[jeffian] 02/7/2013 10:39

www.investegate.co.uk/vianet-group-plc--vnet-/rns/director-pdmr-shareholding/201307021016513925I/

Well it's a very modest amount but there may be some relevance that it was the Non-Exec Director with no axe to grind who bought.

[pj 1] 13/6/2013 08:07

So it stops them watering the beer down, taking short cuts with cleaning and H and S requirements. Not sure if it prevents John Smiths being added to Old Speckled Hen or not though?

Or am I too sceptical?

[mathewawood] 12/6/2013 22:49

Sorry didnt paste this in between thus and So..."Intelligent flow meters are installed on every line under the bar counter. The meters can distinguish whether the fluid passing through the meter is beer, water, or line cleaning fluid. Therefore the volumes that are displayed on the web site for comparison against the till are beer only, with volumes identified as water or line cleaning fluid removed. between"

[mathewawood] 12/6/2013 22:46

Reading both reports it seems to me that the government has issues with the older brulines flow system and it not differentiating between beer and water (page 36 2008 report) with the 2013 report stating its "contreversial".
But on the vianet site they describe the capabilities of I-draught thus So if vianet can prove this to the govt then surely that will satisfy all parties. With the added bonus that the old brulines will need to be replaced with the new and more expensive I-Draught.
Am I being naive here?

[hastings] 12/6/2013 13:07

Some good posts jeffian. I don't hold, although have been keeping an eye on these without undertaking too much research. Totally agree with your comments on managed pubs etc and I wouldn't have thought attractive to free house operators.
Interstingly, around our way here in Cambridge a number of pubs sold off or closed by Greene King and Punch have been reopened by Individuals or small partnerships, using local micro breweries etc. Is this a trend? if so, what are the potential implications for iDraught further down the line. No pun intended!

[jeffian] 12/6/2013 10:39

As with almost everything in this industry, the difficulties stem from the Government's disastrous Beer Orders in 1989 which broke the link between breweries and their pub chains. The politicians, who had an axe to grind, decided - in the face of the evidence - that the brewers were operating a "complex monopoly" which needed to be broken up (despite there then being 6 major national brewers competing with each other across the country. How many are there now?!). The "tie" makes much more sense to the general public when its purpose was ensure that the brewer's pubs sold its own products (in the same way that you expect to buy BP petrol when you go to a BP petrol station). Once the major brewers were forced to sell off their pub estates, the new pubco owners inherited the 'tie' arrangement but did not themselves produce beer, so they buy it in bulk from the brewers at a discount and sell it on to their tenants at a higher price. If dear old Vince starts meddling some more in the contractual arrangements between the owners of pubs and their tenants, I guarantee that the Law of Unintended Consequences will strike again and that the result over a few years will be neither the one he intended nor wanted. Anyway, if it's right to interfere here, why not look at the same relationship with petrol retailers? What about retailers operating franchises? Where will it all end when the state starts interfering in commercial contracts between (initially) willing parties?

[harry the haddock] 12/6/2013 08:51

thanks jeffian - you sum it up far better than i ever could although my sympathies lie perhaps more with the licensee than the pubcos!
1 area you haven't mentioned where vianet's products will probably always be needed is in the clubs /nightclubs sector

[jeffian] 11/6/2013 20:43

iDraught certainly has benefits to Managed pubs and bars in controlling their stock, product quality, staff pilfering etc. but it's just a question of numbers. The vast majority of the UK units are installed in tenanted pubs. I guess Wetherspoons is (one of?) the largest UK Managed pub chains and they have around 700 pubs. ETI and PUB have around 5-6000 each!

[outsizeclothes.com] 11/6/2013 20:21

If iDraught hasn't the economic benefits to justify it's installation, how are they ever going to sell it in the US ?

[jeffian] 11/6/2013 18:40

The problem relates to the way ETI/PUB etc. use the equipment to charge their tenants. "Tied" tenants are required to buy their beer from the brewer/pubco at higher figures than they would have to pay independent wholesalers. The additional margin is called a "wet rent" (i.e. it is income for the pubco over and above the rent charged for the property), but it rises and falls in line with beer volumes going through the pub. Publicans, who resent this, illegally bought in beer cheaply from independent suppliers which reduced both the apparent volumes going through the pub and the additional income going to the pubco. Historically, it was very hard to prove when a tenant was "buying out" and Brulines was seen as a godsend. If there was more beer shown to be flowing through the pipes than the tenant had brought from the brewer/pubco, the assumption is that he bought it somewhere else. The trouble is that the pubco's dealt with the issue quite aggressively by simply billing the tenant for the 'additional' beer which they believed was being bought elsewhere. This made them both judge and jury, and there are no grounds for appeal. Because the equipment is not used for measuring the amount sold to customers, it falls outside Weights and Measures legislation, so there is no statutory body to monitor its calibration and check that it is actually correct. Some tenants sought to prove that it was fallible and, therefore, pubco's may be "fining" tenants for selling non-existent beer. That is the nub of the 'fairness' argument. Tenants have 'bought out' since time immemorial and it is an indication that Brulines works, by and large, that they are making such a fuss about it! An organisation called Fair Pint has successfully lobbied Parliament to attack the whole basis of the 'tie' and it rather looks as if Vince Cable has swallowed the argument. His comments suggest that he would favour a "Free of Tie" relationship between a brewer/pubco and its tenants whereby the tenant pays a full market rent for the property and is allowed to buy his beer anywhere he likes. Theoretically, this means you could walk into a Marstons pub but not find any Marstons beer! The removal of the 'tie', if insisted upon by the Government, would lead to another period of massive upheaval in the pub industry and, although iDraught no doubt has its management uses, the vast majority of installations in tenanted property would become superfluous and VNET's business would be decimated. One hopes that common sense will prevail, but this is politicians we're talking about! If they succeed, it will be interesting to see if you can then go down to your local BP garage and demand Shell petrol!

[harry the haddock] 11/6/2013 14:43

it was more to do with the actual measuring capability - various licensees were complaining about false readings which was leading to problems with punch/enterprise etc

[outsizeclothes.com] 11/6/2013 12:32

Surely iDraught addresses many of the "technology complaints" of 4+ years ago? It's set up to ensure optimal line washing, and water / cleaners used won't be flowing through the lines at the same temp as beer, so will be easily differentiated.
Having had my fair share of dodgy pints, iDraught was one of the reasons I bought in here in the first place.

[outsizeclothes.com] 11/6/2013 12:13

Is the company still using the exact same technology in Brulines as it did over 4 years ago ? The Parliamentary Business & Enterprise Committee's report is from May 2009, so the Brulines equipment seen in action/reported on was that of 2008/2009.

[dell1234] 11/6/2013 11:22

Shares mag article on today's events:
hxxp://www.sharesmagazine.co.uk/news/vianet-is-still-in-danger-territory#.Ubb5_Pk3s_w

[sleepy] 11/6/2013 10:50

Harry the haddock - great name!

[harry the haddock] 11/6/2013 10:42

Private eye have covered this on and off or a couple of years now outsize

[outsizeclothes.com] 11/6/2013 09:21

A very nasty possible spanner in the works. Who are the "certain parties who have made unproven accusations against our technology"? and what's their "evidence"?