By Matthew Legg

Last updated 13:01, Thursday, 04 September 2008

Cumbria's biggest pub landlord, Punch Taverns, is the latest victim of the downturn in the drinks trade.

Punch Tavern: The John Paul Jones in Whitehaven

Punch Taverns has reported a fall in sales as boozers battle against the credit crunch, a fall in consumer spending, cheap beer in supermarkets and the smoking ban. Punch said like-for-like sales at its 7,560 leased pubs in the UK fell 3.5 per cent in the 12 months to August 23, while sales at its 864 managed pubs were 3 per cent lower.

Punch owns scores of pubs across Cumbria including The Enterprise, at Briar Bank, Carlisle, The Royal Victoria, in Maryport, The Appletree, in Workington, and the John Paul Jones, in Whitehaven.

Punch said in a statement: “The challenges which our industry and licensees are facing currently have been well documented. A number of considerations have led the board to review the group’s use of the cash that it generates.

“In the current financing market environment, the board considers it prudent to retain cash and further strengthen the balance sheet ahead of returning cash to shareholders through distributions.”

The news hammered Punch’s shares, sending them 12 per cent lower in London and denting sentiment across the whole sector. Punch’s shares dropped 38.5p. Rival pub firms Enterprise Inns fell 10 per cent, Mitchells & Butlers shed seven per cent and JD Wetherspoon lost six per cent.

Punch said it will not be paying a dividend to shareholders because of the downturn.

Cumbria’s pub, club and restaurant trade has endured one of the toughest climates in generations this year.

Closures already in 2008 include Carlisle nightclub the Twisted Wheel, Yates’ Wine Lodge in Citadel Row, Babylove nightclub in Botchergate and Leonardo’s restaurant in Lonsdale Street.

MLegg@cngroup.co.uk