Harry Costigan defies slump with bars expansion

Sep 25 2009 by Peter McCusker, The Journal

A FORMER director of one of the region’s biggest pub companies is defying the gloom in the on-licenced trade by unveiling plans to treble his bars portfolio as other operators look to make further closures.

Harry Costigan, a former operations director of Pubmaster, now owns Buffalo Joe’s on Gateshead Quayside and has just opened a fourth outlet of the business he runs with his son and daughter.

Newcastle-based Mr Costigan says his latest venture, Leopard Leisure Leased, is well-placed to capitalise on some of the woes currently being experienced by the bigger “Pubco” players such as Punch Taverns and Enterprise Inns.

Over the summer Leopard took over circuit pub The Empress, near St Nicholas Cathedral in Newcastle, to add to its other city-centre cask ale bar The Hotspur on Percy Street.

Leopard, which Costigan runs with son Christopher and daughter Gillian, already runs vertical drinking bar the High Crown, Front Street, Chester- le-Street and community local the Berkeley Tavern in Whitley Bay.

He said: “The likes of Punch and Enterprise are finding it difficult to get people to run their pubs and this is providing opportunities for independent operators to take over the leases.

“We do not have a particular model. Our existing pubs range from community locals to real ale bars, to circuit pubs. This gives us the flexibility to move when the right opportunity presents itself.

“We want to run good pubs with good tenants. At the moment we have four and with the systems we have in place we are looking to take this up to around 12. We are currently involved in talks which could see us take over more.”

Mr Costigan started working in the trade in 1981 when he took over the running of Reflection nightclub in the Bigg Market, Newcastle, for Hartlepool-based brewer Camerons.

He was one of 14 shareholders of Hartlepool-based Pubmaster who all became millionaires in 2003 when the company was bought by Punch Taverns.

He had launched Buffalo Joes with two business partners in 2001 and is now sole owner through his company Home Grown Leisure.

The ’pubcos’ such as Enterprise Inns and Punch Taverns fell under the spotlight in a recent CAMRA report.

CAMRA claims more than half of UK pubs operate under the beer tie arrangement, which prevents pub landlords buying beer and other products on the open market. It said the current system meant licensees paid around 50p a pint over the odds as a result.

CAMRA chief executive Mike Benner said the tied model could work well when the risks and benefits are shared equally between pub-owning company and the landlord. Unfortunately, this is not the current reality.

“Pub-owning companies are able to earn excessive profits by increasing the cost of beer to their ‘tied’ pub landlords who have no choice but to accept high prices and pass them onto the consumer.

“This practice has led to higher prices in pubs and has widened the gap between pub and supermarket prices, encouraging people to shun the pub for their armchair.”