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Statutory code: Large pubcos could shift back to old-fashioned tenancies to avoid regulation

By Michelle Perrett , 08-Jan-2013
Last updated on 09-Jan-2013 at 10:04 GMT

Related topics: Pub industry statutory code, General News

Large pubcos could shift back to the old-fashioned tenanted model if the Government fails to implement its statutory code correctly, BII chairman Bernard Brindley has warned.

Statutory code: Large pubcos could shift back to old-fashioned tenancies to avoid regulation

He was speaking exclusively to the Publican’s Morning Advertiser in the wake of the Government announcement which detailed plans to introduce a statutory code of practice and an adjudicator to regulate the relationship between pub companies and their tenants.

The Government said it would consult on the proposals but said it expected it to apply to all pubcos with over 500 leased pubs.  It said it is likely to exempt smaller companies, which it claims evidence suggests have been behaving responsibly.

Brindley, who chairs the board of the Pubs Independent Rent Review Service (PIRRS), which oversees the PICA-Service arbitration scheme, warned: “We haven’t seen the detail.

“Is the Government talking about 500 leases or leases and tenancies? There is a possibility that a lot of larger pubcos will return to the old fashioned tenancy and go back to three to five year agreements.”

He also raised concern that the statutory code would only cover a few companies within the sector while the self-regulation deal covers many pub companies with under 500 pubs.

He said that he was “fully committed” to pushing ahead with the arbitration service PICA-Service, the BIIBAS accreditation of the codes of practice, version 6 of the Industry Framework Code and would want the PIRRS to remain. He believes these could complement the Government plans and could regulate pub companies with under 500 leased and tenanted pubs.

He also raised concern on how the Government plans to implement its committment that a  tied tenant should be "no worse off than a free of tie tenant.”  But admitted he believes there needs to be a better distribution of profits between the pubco and the tenant.

“I don’t think anyone denies that,” he said.

Brindley added: “I am disappointed that self-regulation hasn’t been given a chance to prove itself. Self-regulation is starting to work and progress made.”

Business minister Vince Cable is expected to make some clarifications in the House of Commons tommorrow during the opposition Labour debate on pubcos.

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