Vianet Share Discussion Threads

[paulypilot] 26/7/2013 15:05

Jeffian,

I raised this point with the company, and they told me that PubCos are not meant to charge tenants based on the Brulines system, and that generally they don't. They are aware of one PubCo who used to do this, but now doesn't.

The Vianet systems are not designed to be 100% accurate, but are instead there to detect changes in the trend of beer useage. This is an early warning system to the PubCos that a tenant may be introducing illicit barrels of beer, in contravention of the Tie. The PubCos then investigate further, if the Brulines system has identified a problem.

Vianet say that the better pub tenants welcome the system (esp. iDraught) as it gives them valuable management info which helps them spot staff pilferage, and plan staff rotas, etc.

Without a Brulines system in place, apparently the level of illicit beer supplies is typically 7%. So there's no way the PubCos will want to see this system outlawed, and they have considerable lobbying power.

regards, Paul.

[ccraig69] 26/7/2013 13:48

Then would water meters etc have to be brought under W&M as well?
If you ban Brulines offering where would water companies stand.

[c1d] 26/7/2013 10:50

jeffian,
Thanks. Do you have any views on whether the outcome of the consultation is likely to be changes to what pubcos can and can't do with the flow information (e.g. would need other supporting evidence before penalising tenants) or an outright ban on the equipment? Do you know if amendments to how the data can be used would satisfy those people who are anti the equipment?
Regards

[jeffian] 26/7/2013 10:29

c1d,

My post #313 addressed this issue. The problem is the very aggressive way in which the pubco's use Brulines. Most tenanted pubs pay for their supplies by Direct Debit. If Brulines shows a discrepancy between beer sold and beer supplied, they simply put a charge through on DD for the difference! (i.e. they act as judge, jury and hangman). I don't know whether the equipment is completely foolproof but an Enterprise tenant called Simon Clarke, who is also a qualified Chartered Surveyor and a big noise in the Fair Pint campaign, reckons to have shown by example that it is not. If the pubco's were a bit more sympathetic in the application of the system, there would not be a problem IMHO.

[masurenguy] 26/7/2013 09:56

Thanks c1d - some very interesting insight into to the whole issue.

[paulypilot] 24/7/2013 08:33

See my morning report from yesterday deanowls:

Regards, Paul.

[deanowls] 24/7/2013 08:22

Any feedback from the meeting at all?

[paulypilot] 16/7/2013 16:00

Hi Deanowls,

I posted about the key points from my meeting with Vianet last week here:


Also a further comment in today's report, here:


Note that this website doesn't seem to corrupt links if you put them through tinyurl first.

Regards, Paul.

[deanowls1] 16/7/2013 14:22

Paulypilot, you mentioned last week you may do a write up of your meeting with the management?

[alan@bj] 11/7/2013 10:20

PJ - no, it's just that some of them don't like being found out for buying in cheaper beer from outside suppliers. They don't understand that unless the pubco's get a decent return they won't invest in the pubs.

[pj 1] 10/7/2013 11:13

Hmmm
Looks like PP has answered my concerns today on his Report, about John Smiths being used to dilute Old Speckled Hen. i.e. The monitoring system would pick it up through usage.

I wonder if the tennents or is that (Tennants?) are also using Human Rights as an argument against monitoring measurement? Getting interesting

[paulypilot] 09/7/2013 22:24

Hi,

If you think the statutory code could make it into law, then the shares are very risky. If you think the statutory code won't make it into law, then the shares are cheap (yielding 8.4% now). That's the crux, in my view.

I'm leaning towards the latter view, based on my enquiries, whilst accepting that short term sentiment on the shares might remain negative for a while.

Cheers, Paul.

[tech] 09/7/2013 20:59

Looking well overvalued at this time, still a lot of risk and 55p or lower looks possible. Require a positive statement from the company to have any confidence in investing.

[masurenguy] 09/7/2013 20:13

Does it ! Perhaps you would like to clearly demonstrate that by showing it here otherwise you could just as easily post that the chart looks fantastic here !

[nw99] 09/7/2013 08:24

Chart looks awful here

[jeffian] 05/7/2013 23:58

Paul,

Well I'm sure it did happen, though I'm not sure it currently happens as I've been retired for a year or two (or more!) now.

hxxp://www.fairpint.org.uk/news_090625i.html (Edit: change the 2 x's to t's to overcome ADVFN's pathetic attempt to make us pay to use their service!)

My company was one of the first to install Brulines equipment. We were subsequently taken over by Enterprise Inns and I'd like to think they got the idea from us, but maybe they'd have gone there anyway.

I think you're right to recognise the risk. I haven't sold down because I don't have enough to worry about but I certainly wouldn't want to bet the farm on these at the moment. Common sense says Cable is barking up completely the wrong tree, but when did politics have anything to do with common sense?

Pub tenants are already protected by the Landlord & Tenant Acts and invariably have arbitration provisions written into their tenancy agreements/leases. If Cable thinks that Government intervention is required to ensure 'fairness', then why stop here? Why not investigate Franchise agreements (whereby operators are forced to buy goods from the central source and pay a fee for the 'brand'), or petrol filling stations which are 'tied' to their oil company, or indeed any tenant of any commercial property?

I've noted the Director share buys. I hope it is a show of confidence, not bravado.

[paulypilot] 05/7/2013 20:08

Hi Jeffian,

Are you sure that's right though? I've been told a different version of events - that the PubCos use the Brulines product to flag up problem tenants, and then launch further investigations based on the discrepancies flagged up by Brulines.

I've been told that the PubCos don't actually invoice from the Brulines readings, as you've suggested. So it would be good to get to the bottom of this, and it will be one of the questions I'll ask the company when I finally manage to pin them down to talk to me.

I've been googling some more, and came across this booklet from a large Pubco to its tenants, explaining flow monitoring. It talks about investigating discrepancies & finding evidence for them, not automatic fines based on Brulines:


This booklet from Punch Taverns explains how they use Brulines, and it's very much presented as a management tool to help the tenant!


And the Chairman of the British Beer & Pub Association thinks the Code will never come to fruition:



I'll see what else I can come up with, but my feeling is that the share price having dropped from about 88p to 72p tells me that the market has priced in an element of risk, but clearly it is not seen as a catastrophic risk by the stock market, otherwise the share price would be very much lower than this.

Management are signalling that they can bat away the risk, hence maintaining the dividend, and recent £20k Director buy. If they thought the problem was really serious, then surely they would have passed the dividend, and conserved cash?

Regards, Paul.