Midland-based pub giant Enterprise Inns is to offload around 200 pubs, including 14 in the West Midlands, in a £100 million sale as the consumer downturn forces drinkers to stay at home.

The Solihull firm announced it was putting 200 bar outlets across the UK on the market after reporting a 12.6 per cent slump in full-year pre-tax profits.

Enterprise is set to sell off four pubs in Birmingham and 10 in the rest of the West Midlands.

The group, which has 7,700 pubs, said sales had been hit by a smoking ban and a sharp deterioration in consumer spending as the economy slips into recession.

Chief Executive Ted Tuppen said the group’s results – which revealed profits of £263 million for the year to September 30 compared to £301 million the year before – were “solid” in a very difficult year for the pub sector.

But he added: ““The trading environment is tough and is likely to remain so during the coming year.”

The group said in a statement: “This has been a very difficult year for the pub industry.

“In addition to the first year impact of the ban on smoking in public places, our licensees have had to endure a serious deterioration in consumer spending and confidence brought about through rising costs and taxes, the virtual collapse of the banking system and a UK economy sliding further into recession.”

The group said the majority of its pubs continued to trade successfully, but licensees had had to work “much smarter and harder simply to stand still in terms of profitability”.

Enterprise estimated the average level of potential licensee profitability had fallen by around four per cent to £45,000, with those venues not offering food being hardest hit.

“Whilst the growth in food revenues has to some extent offset declining beer sales, overhead costs have increased.

“There are of course wide variations in performance, depending upon the retail profile of each outlet.

“Not surprisingly, smaller, wet led outlets have suffered most, with some becoming unviable in the face of the smoking ban and aggressive pricing of alcohol in the off trade.”

Enterprise invested £68 million into the estate during the period, improving facilities at more than 1,587 of its pubs.

The group purchased 58 pubs during last year, at an average cost of £828,000, and also disposed of 58 outlets.

It added: “During the coming year, the team will focus on disposing of underperforming outlets, predominantly for alternative use.

“Although the market is subdued as a result of the lack of credit available to developers, we remain confident that the disposal programme will deliver a significant amount of cash and a profit above book value.”

The pubs sale marks a reverse in Enterprise’s relentless progress of recent years, which has seen the firm grow from 368 pubs at its foundation in 1991 to just under 8,000 today.

Although Enterprise said it still found the principle of converting to a real estate investment trust (REIT) attractive, it did not consider it appropriate to pursue this plan in light of the current turmoil in financial markets.

Mr Tuppen recently hit out at the Government’s treatment of the pubs industry, backing calls by trade body the British Beer and Pub Association (BBPA) for it to abandon plans for alcohol taxes to rise above the rate of inflation for the next five years.

In doing so he echoed the sentiments of many others in the industry, including those of Midland rival M&B and J D Wetherspoon.

The BBPA has already warned of mass closures within the industry unless the decision is reversed.