A West Midlands pub company has set up a management firm it hopes can save dying pubs.

Tamworth-based Mercury Liquid was set up by Kevin Thornton and Mark Butler to give ailing publicans, banks and receivers an alternative to selling.

They use their experience running pubs to take over the management of a threatened watering hole and keep it running while the owner looks for a buyer.

The smoking ban, the economic downturn, and increased competition from low-priced alcohol at supermarkets mean the pub trade is under a huge amount of pressure. More than 30 pubs are closing every week according to the British Beer and Pub Association.

But Mr Butler, one of the joint managing directors of Liquid’s parent company Mercury Inns Group, said independent management could be a lifeline for owners stuck with failing pubs.

“In all the doom and gloom we are trying to save the business, create jobs and ride out the economic storm,” he said.

“Currently we are operating 30 pubs, we have got another 30 that we are about to take over and we see a growing trend that should end up with us having about 100 properties by the end of February.

“With the credit crunch the problem is that for operators times are tough, consumer spending has gone down and the cost of finance is going up so there is a pressure on cashflow. Normally in good times the option would be to sell the asset, but that isn’t an option at the moment because even if they were willing to sell, there is no one who would want to buy.

“Like in the housing sector the values of freehold properties and leaseholds are dropping, any potential purchasers are waiting to see how things pan out.”

Mercury Liquid said its experience would let those managing assets to exploit a viable alternative to selling – with businesses being able to stay open, trade successfully, mitigate losses and enhance the value of the business.

While the management was always done with an eye towards selling in the future, making the pub more successful would make it a much more appealing prospect for potential buyers in the future.

“The banks have no options, they either call the loan in and close the pub or support the pub,” said Mr Butler.

“To start with, we review a business and see what can be achieved quickly to reduce the losses – this can be from using our own buying terms or by taking a close look at the offer across each and every pub or bar in the company.

“We can then improve operational excellence, introduce robust accountancy procedures and reports, enabling the receiver, bank or insolvency company to take stock of the overall business and seek a sale for a business, which is more attractive to potential suitors.

"The first thing we do is to control the business, looking at the overheads, trying to get rid of any trading losses. Then we’d look at what’s the menu, what’s the price list like, and look at the retail costs that go with it. Once we have got the business in order then it’d be time do a bit of local marketing. It brings back confidence, and soon the business is up and running.”