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Parliament pubco debate: Beer Group chair concerned that Govt is legislating only some companies

By Gurjit Degun , 09-Jan-2013
Last updated on 09-Jan-2013 at 22:54 GMT2013-01-09T22:54:09Z

Andrew Griffiths: “I’m not sure the Government has thought this through”

Andrew Griffiths: “I’m not sure the Government has thought this through”

The chairman of the All-Party Parliamentary Beer Group has accused the Government of not thinking through its approach to regulate the pubco-tenant relationship.

Yesterday, the PMA exclusively revealed that the Government is to introduce a statutory code and an independent adjudicator to regulate the trade.

In an Opposition Day Debate on the topic in Westminster today, Andrew Griffiths said that he was concerned that the Government will only be legislating a small section of the trade.

He said: "I fear that we are proposing legislation to tackle the actions of one or two companies, and I think that that is dangerous.

"I urge caution for two reasons. One is the fact that we are considering the creation of first-class and second-class pubs. We are considering intervening in the business model. We are proposing, through statutory regulation, to force “tied-lease” companies with more than (500) pubs to offer a fair deal. We are proposing to regulate the way in which their rents are set within their estates.

"However, another company with 380 or 450 pubs will not be regulated. I am not sure that the Government have thought this through in the context of competition and free markets. There are serious questions to be asked. If we want fair dealing for tenants, should we not offer fair dealing to all companies that own pubs? As I said earlier, there are 52,000 pubs in the country, and we are intending to introduce legislation that affects only some of them."

He added: “All tenants can now go to arbitration, but the arbitration system is funded by the industry as a whole, and large companies such as Punch Taverns and Enterprise Inns are paying the lion’s share of the cost of that self-regulatory body. Those companies will not be prepared to pay to be regulated twice: they will pay either for statutory regulation or for self-arbitration, but not for both, so I wonder what will happen to the self-regulation system.

"Have the Government talked to the industry about the implications of the big two or big six pulling out of funding the self-regulatory body? I also wonder how much pressure the industry will put on the smaller companies to sign up.

"I acknowledge that that is not such a big issue, but everybody has signed up to the self-regulatory code, and that pressure will dissipate if the Government’s new system is introduced. Legislation is being proposed in order to tackle one or two problem companies, but have the implications for the rest of the industry been fully thought through? I urge the Minister to address those concerns."

Griffiths added that the tie is not the only problem harming the pub trade. “We recognise that the beer duty escalator, and the amount brewers and pubs are paying is killing the pubs and breweries.”

He called for the Government to scrap the beer duty escalator.

Responding to an earlier question by John Healey MP, Business minister Vince Cable said that he voted for the escalator because “it is an important source of revenue for the Government”.

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