Time is running out for pubcos to reform

It's May 2011, notable not only for the failed referendum on voting reform and some interesting local elections (for the Lib Dems, the less said about it the better); but also for everyone in and around the pub trade due to the impending deadline for pubcos to reform or face intervention.

The Business & Enterprise Select Committee will soon announce dates of the final inquiry into pubcos and the tie. The coalition is committed to the previous Government's deadline for the pubcos to reform themselves, via new codes of practice with very specific new rights for tenants.

We do now, of course, have codes introduced, following on from the British Beer & Pub Association (BBPA) code of practice.

The last select committee report said: "The new framework code of practice appears to be a modest step in the right direction. We expect major pub companies to treat it as an absolute de minimis requirement and to significantly build on it with their own codes. Only by doing so will pubcos be able to demonstrate they are committed to reform."

So the key issue the committee will consider is: have the companies' codes gone further and have they therefore shown a genuine commitment to reform?

Free-of-tie options​

The select committee and the Government are clear. The new codes of practice must include a genuine free-of-tie option, accompanied by an open-market rent review and provision for hosts to offer a guest beer outside the tie. In the event the pubcos fail to meet these criteria by next month, the Government will intervene and implement a statutory industry code of conduct.

Currently, the framework code of practice does not provide a free of tie or guest-beer option and pubcos have failed to do what the select committee asked and have not built on the framework. No company code published so far offers a genuine free-of-tie option and few fully offer a guest-beer option.

Probation​

The history is clear. The pubcos have already been subject to three select committee inquiries and have had over six years to implement an adequate voluntary code. They still seem unable, or maybe unwilling, to do what has been asked of them.

As Business Secretary Vince Cable said, pubcos remain on "probation". The probation is soon to come to an end.

If, at that time, pubcos are not doing what they've been told they must — the Government must stick to its promise and at last introduce a legally-binding code of practice that rebalances the tenant-pubco relationship for good.

Greg Mulholland MP chairs the All-Party Parliamentary Save the Pub Group and is a leading campaigner on pub and beer issues.​