Pubco chief defends beer tie in front of MPs
A pubco chief has been forced to defend the beer tie in front of a panel of MPs.
Simon Townsend, chief operating officer of Enterprise Inns, was yesterday asked by one MP if he thought the "difficult rental regime" was contributing to pubs' problems.
He said: "I don't believe the tie has anything to do with the difficulties faced by some pubs because its key factor is that it should be able to respond to economically challenging changes.
"Companies like ours may get it wrong, but businesses fail despite the model they are operating in. Not all pubs and publicans will be successful at what they do."
He added that some licensees' credentials may not be "good enough to survive in the current market".
The lively session at Portcullis House, Westminster, was part of the All-Party Parliamentary Beer Group's inquiry into the future of community pubs.
However it provided a snapshot preview of the upcoming review of the 2004 Trade and Industry Select Committee (TISC) inquiry into pubcos, announced last week.
Asked by MP Greg Mullholland whether he was happy about the review of the inquiry, Townsend replied: "I do not think anyone should be surprised the review has come around."
He added he did not "fear" what the review will cover.
Townsend also said that Enterprise was "helping provide substantial help to "many hundreds" of its pubs.
"The worse thing for a business like mine is a closed pub," he added.
Challenged by Mullholland about how many Enterprise licensees had forfeited or surrendered their pubs, Townsend eventually repsonded it was not a "significant number".
Earlier Kate Nicholls of the Association of Licensed Mutiple Retailers revealed figures showing gaming income had fallen 40 per cent over the past year for managed community pubs.
She also reported that live music costs had dropped 31 per cent, but accredited this to many pubs dropping bands because of increased costs under the Licensing Act.
Martin Rawlings, director of pub & leisure at the British Beer & Pub Association, said scrapping gaming duty would be one solution to helping struggling pubs.
He also urged less regulation and called for a more "incentivised" approach from government.
Townsend said he did not believe the government recognised the role that pubs had to play in the community and later branded the amount of administration pubs face as "hideous".
"They bracket all pubs and alcohol in a terribly unhelpful way," he added. Townsend also hit out at the rating system for pubs.
"The five-year cycle is very inflexible," he said.
