‘There are only so many hits you can take as a business’: Both sides being hurt by fishing dispute

Published

3 years ago

November 5, 2021

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Brexit is done, and for many, there’s genuine relief it’s over.

But ongoing disagreements and post-treaty disputes are having real world costs to businesses who say they feel let down and misled by the Brexit process.

The row over fishing rights and the threat of retaliatory action from the French have already cost one oyster producer in Kent tens of thousands of pounds worth of business.

Meanwhile, Sky News has learned that the Department for Transport has asked a Kent lorry park that is due to close shortly, to stay open for a few months longer over Christmas to help with anticipated extra pressure on an already strained supply chain.

“There are only so many hits, so many body punches you can take as a business and get back up and start again,” says James Green, director of The Whitstable Oyster Company.

Mr Green’s business is based in the picturesque north Kent town, famous for its oysters.

It has farmed oysters for generations and is responsible for about a third of the UK’s entire production.

But Brexit has already cost them dearly. New rules mean he can no longer export fully-grown market-sized oysters to France – those exports had accounted for around 50% of his orders, and that disappeared overnight.

He moved his focus to building up the domestic market, an encouraging albeit slow process, and continuing to export juvenile oysters to France.

This is still allowed because the juveniles are put back in the sea off the coast of France, to be harvested later by his buyers.

But last week as the post-Brexit fishing row intensified, French threats set him back further.

In a disagreement over how many licenses have been granted to French trawlers operating in British waters, France’s president Emmanuel Macron set an ultimatum, demanding the UK grant more or face retaliatory measures including British boats being banned from landing their catch in France and increased customs checks on exported British goods.

Such tightened restrictions might have included the removal of veterinary checks in France that are necessary for James to sell his oysters there. His buyers got nervous and cancelled orders – he lost roughly £25,000 worth in just a few days.

“With farms you can’t stop, you’ve got to continue otherwise the stock becomes unsellable,” he said.

“There are quite a lot of costs involved in continuing that process, so it’s frustrating.

“Coupled with COVID, coupled with Brexit, coupled with water quality from Southern Water, this is the fourth thing in the space of less than a year that has had a massive impact on our industry.

“You can’t just take away that main market overnight and expect these businesses to continue because they’re just not.”

Mr Green voted for Brexit in 2016, and said fishing rights were his key motivator. But the reality has not been as he was promised, and he said repeated reassurances that his exports would not be affected now feel misleading.

“I think the deal we got was very, very poor, very poor,” he said. “So I probably would change my vote, if I’m honest.”

The threats from France were deferred this week, paving the way for talks between Lord Frost, the UK’s chief Brexit negotiator and France’s Secretary of State for European Affairs, Clément Beaune.

Under the Brexit deal, French trawlermen who had traditionally fished between six and 12 miles off the coast of the UK would be allowed to continue to do so as long as they could provide proof they had fished there every year since 2016.

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While the French have said that too few licenses have been granted, the British have said that those not approved have not provided sufficient evidence.

But despite all the smiles and handshakes for the cameras, positions on both sides are still entrenched and no significant progress was made.

The context this side of the Channel is not just businesses suffering, but a supply chain already stacked up.

Some say a system still grappling with global delays and a shortage of lorry drivers can’t cope with much more pressure.

Any further delays or customs checks at ports may well be seen and felt in lorry parks across Kent.

Sky News has learnt that the Department for Transport has asked one such site, Ashford International Truck Stop that was due to close shortly in favour of a new bigger site next door, to remain open for a few extra months over Christmas.

A sense perhaps that preparations are being made for extra seasonal pressure.

On the other side of the Channel there is another side to this story.

Laurent Merlin fishes for crab from Boulogne sur Mer. He has been fishing in British waters since the 1990s and his father did the same for years before him. But he hasn’t been granted a license yet and he’s getting desperate.

“It’s frustrating because it has now been 10 months that we’ve been waiting,” he said.

“If we get nothing, we will have to react. If we don’t we won’t be able to continue. French waters have been overfished, there are no fish left there.”

Officials will talk again in the coming days and while they’re talking, threats are unlikely to be actioned.

On different sides of these waters there’s different sides to this story, but ongoing disputes are costing.

Business

Cineworld owners screen plan for stock market comeback in New York

Published

8 hours ago

November 17, 2024

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Cineworld owners screen plan for stock market comeback in New York

Cineworld’s hedge fund backers are drawing up plans to return the cinema operator to the public markets amid continuing uncertainty about the future of dozens of its British sites.

Sky News has learnt that the company’s owners are at the early stages of considering a New York listing for the business, with the first half of 2026 considered a likely window for it to take place.

City insiders said that a flotation was likely to encompass Cineworld’s operations outside the UK, with the group’s board expected to consider a sale of the British operations at some point.

They cautioned, however, that no decisions had been reached and would not be for some time.

The fate of Cineworld’s business in the UK has been mired in uncertainty for months, with the company initially exploring a sale of it before turning to a restructuring plan which compromises many of its landlords and other creditors.

It has announced the permanent closure of six sites, but it emerged last month that nearly 20 more were at risk of being shut amid ongoing talks with property owners.

The restructuring plan is due to complete later this month, which some landlords have opposed over the fairness of its terms.

Documents circulated as part of the restructuring plan process highlighted the fact that the company did not have sufficient funding to meet a quarterly rent bill on June 24 of £15.9m.

“Absent this funding, the UK Group would have been insolvent on a cashflow basis,” they said.

Other cinema operators, such as Odeon, are now poised to step in to take over small numbers of Cineworld’s other sites.

The company trades from more than 100 locations in Britain, including at the Picturehouse chain, and employs thousands of people.

Cineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.

Its multibillion-dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.

It delisted from the London Stock Exchange in August 2023, having seen its share price collapse.

In addition to the UK, Cineworld also operates in central and Eastern Europe, Israel and the US.

Cineworld has been contacted for comment.

Business

Former Tory minister Heaton-Harris eyes top job at football regulator

Published

1 day ago

November 16, 2024

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Former Tory minister Heaton-Harris eyes top job at football regulator

A former Conservative cabinet minister has thrown his hat into the ring to become the inaugural chair of Britain’s new independent football regulator.

Sky News has learnt that Chris Heaton-Harris, who stood down as an MP at July’s general election, is among those who applied for the role ahead of a deadline on Friday.

Mr Heaton-Harris is himself a qualified football referee who has officiated at matches for decades.

A former Northern Ireland secretary and chief whip under Rishi Sunak and Boris Johnson respectively, he said in 2022 of his part-time career as a football official: “I took a [refereeing] course and that was it, I’ve been going ever since.

“Football has done wonders for me throughout my life so I would recommend it to everybody.”

Mr Heaton-Harris is among a large number of people who have applied for the role of chair at the Independent Football Regulator (IFR), according to officials.

A publicly available timetable for the search says that interviews for the £130,000-a-year post will end on 11 December, with an appointment expected in the new year.

It is the second time that the government has embarked on a search for a chair for the IFR after an earlier hunt was curtailed by the general election.

The role will be based at the watchdog’s new headquarters in Manchester and will require a three-day-a-week commitment.

The Football Governance Bill had its second reading in the House of Lords this week, as part of a process that will represent the most fundamental shake-up in the oversight of English football in the game’s history.

The Labour administration has dropped a previous stipulation that the regulator should have regard to British foreign and trade policy when determining the appropriateness of a new club owner.

The IFR will monitor clubs’ adherence to rules requiring them to listen to fans’ views on issues including ticket pricing, while it may also have oversight of the parachute payments made to clubs in the years after their relegation from the Premier League.

The top flight has issued a statement expressing reservations about the regulator’s remit, while it has been broadly welcomed by the English Football League.

The IFR’s creation will come with the Premier League embroiled in a civil war over Manchester City‘s legal battles emanating from allegations that it breached the competition’s financial rules.

Next week, the 20 Premier League clubs will meet for a lengthy shareholder meeting, with a vote on amended Associated Party Transaction rules hanging in the balance.

The league needs 14 clubs to vote in favour for the rule changes to be passed.

Contrary to earlier expectations, however, a detailed discussion on a financial distribution agreement between the Premier League and EFL is unlikely to be on the agenda.

A Department for Culture, Media and Sport spokesperson said: “The process for recruiting the Independent Football Regulator chair is under way but no appointment decisions have been made.

“We do not comment on speculation.”

This weekend, Mr Heaton-Harris could not be reached for comment.

Business

Pizza Hut UK hunts buyer amid Budget tax hike crisis

Published

2 days ago

November 16, 2024

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Pizza Hut UK hunts buyer amid Budget tax hike crisis

Pizza Hut’s biggest UK franchisee has begun approaching potential bidders as it scrambles to mitigate the looming impact of tax hikes announced in last month’s Budget.

Sky News has learnt that Heart With Smart (HWS), which operates roughly 140 Pizza Hut dine-in restaurants, has instructed advisers to find a buyer or raise tens of millions of pounds in external funding.

City sources said this weekend that the process, which is being handled by Interpath Advisory, had got under way in recent days and was expected to result in a transaction taking place in the next few months.

HWS, which was previously called Pizza Hut Restaurants, employs about 3,000 people, making it one of the most significant businesses in Britain’s casual dining industry.

It is owned by a combination of Pricoa and the company’s management, led by chief executive Jens Hofma.

They led a management buyout reportedly worth £100m in 2018, with the business having previously owned by Rutland Partners, a private equity firm.

One source suggested that as well as the talks with external third parties, it remained possible that a financing solution could be reached with its existing backers.

HWS licenses the Pizza Hut name from Yum! Brands, the American food giant which also owns KFC.

Insiders suggested that the increases to the national living wage and employers’ national insurance contributions (NICs) unveiled by Rachel Reeves would add approximately £4m to HWS’s annual costs – equivalent to more than half of last year’s earnings before interest, tax, depreciation and amortisation.

One added that the Pizza Hut restaurants’ operation needed additional funding to mitigate the impact of the Budget and put the business on a sustainable financial footing.

The consequences of a failure to find a buyer or new investment were unclear on Saturday, although the emergence of the process comes amid increasingly bleak warnings from across the hospitality industry.

Last weekend, Sky News revealed that a letter co-ordinated by the trade body UK Hospitality and signed by scores of industry chiefs – including Mr Hofma – told the chancellor that left unaddressed, her Budget tax hikes would result in job losses and business closures within a year.

It also said that the scope for pubs and restaurants to pass on the tax rises in the form of higher prices was limited because of weaker consumer spending power.

That was followed by a similar letter drafted by the British Retail Consortium this week which also warned of rising unemployment across the industry, underlining the Budget backlash from large swathes of the UK economy.

Even before the Budget, hospitality operators were feeling significant pressure, with TGI Fridays collapsing into administration before being sold to a consortium of Breal Capital and Calveton.

Sky News recently revealed that Pizza Express had hired investment bankers to advise on a debt refinancing.

HWS operates all of Pizza Hut’s dine-in restaurants in Britain, but has no involvement with its large number of delivery outlets, which are run by individual franchisees.

Accounts filed at Companies House for HWS4 for the period from 5 December 2022 to 3 December 2023 show that it completed a restructuring of its debt under which its lenders agreed to suspend repayments of some of its borrowings until November next year.

The terms of the same facilities were also extended to September 2027, while it also signed a new 10-year Pizza Hut franchise agreement with Yum Brands which expires in 2032.

“Whilst market conditions have improved noticeably since 2022, consumers remain challenged by higher-than-average levels of inflation, high mortgage costs and slow growth in the economy,” the accounts said.

It added: “The costs of business remain challenging.”

Pizza Hut opened its first UK restaurant in the early 1970s and expanded rapidly over the following 15 years.

In 2020, the company announced that it was closing dozens of restaurants, with the loss of hundreds of jobs, through a company voluntary arrangement (CVA).

At that time, it operated more than 240 sites across the UK.

Mr Hofma and Interpath both declined to comment.