Straitened times put pubs on block

Two popular inner-city watering holes, the North Fitzroy Arms and the Carringbush Hotel, are likely to be sold after their owner was declared bankrupt.

Two popular inner-city watering holes, the North Fitzroy Arms and the Carringbush Hotel, are likely to be sold after their owner was declared bankrupt.

The pubs' troubles underscore recent reports that the hospitality industry is facing its biggest upheaval in decades with scores of venues closing over the past year.

Fairfax Media reported last week that a company associated with restaurateur Paul Mathis was facing liquidation while high-profile entrepreneur Nick Zampelis is scrambling to save his hospitality empire.

Another liquor industry figure associated with a string of well-known inner-city pubs, Michael Reardon, was made bankrupt in June, court documents show.

Mr Reardon and his wife, Rosemary, control or had interests in the North Fitzroy Arms, the Carringbush in Abbotsford, Richmond's All Nations Hotel and the Rising Sun Hotel in South Melbourne.

Soaring labour costs, high rents, a proliferation of licensed cafes and the cook-at-home "MasterChef effect" have been blamed for the hotel industry's woes.

Australian Hotels Association executive Brian Kearney said customers were cutting back spending and higher costs were eating into pub profits. "It's pretty much your standard retail story. Pubs these days are not immune to that," Mr Kearney said.

Pub assets are commonly split into freehold (bricks and mortar) and leasehold (the bar and bistro business), which are brought and sold separately.

The move to sell the freehold of the Carringbush and North Fitzroy Arms follows Mr Reardon's bankruptcy.

At least two real estate agencies were negotiating to handle their sale but PPB Advisory, which has been appointed as receivers, declined to comment.

"We're still trading as normal, we've got a lease in place," the Carringbush's publican, Mick Liszukiewicz, said.

Cafes were an increasing threat to inner-city venues. "That's what's making life harder for your traditional-style pub," Mr Liszukiewicz said.

The fate of the Rising Sun and All Nations is also under a cloud. Until recently both venues were owned by entities associated with Mrs Reardon.

Another receiver, Sellers Muldoon Benton, has been appointed to one of Mrs Reardon's companies, which recently sold the Rising Sun Hotel for $2 million to another publican.

As well, the Australian Securities and Investments Commission was seeking a strike-off action against another company controlled by Mrs Reardon that holds the lease to the All Nations Hotel.

The All Nations gained notoriety in the business community as the meeting place where the late Visy boss Richard Pratt negotiated details of a price-fixing cartel with packaging giant Amcor.

Michael Reardon did not return calls.

sjohanson@fairfaxmedia.com.au

Related Articles