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Statutory Code: FLVA warning that new code could have ‘unintended’ results

By Michelle Perrett , 24-Jan-2013

The Federation of Licensed Victuallers Associations (FLVA) claims there will be “unintended consequences” if the Government fails to regulate against tied pubcos with less than 500 pubs.

The trade association expressed the concern after news that the Government plans to introduce a statutory code of practice and an adjudicator for pubcos with over 500 tied pubs.

FLVA operations director Martin Caffrey said: “Exemption from a statutory code of practice and governance for estates below 500 could
create unintended consequences as did the Tied Estate Order, which artificially restricted the number of beer tied agreements that vertically integrated brewers could operate. The Tied Estate Order created the circumstances under which today’s pubcos were created. The 500 exemption could repeat these unintended consequences by fettering the development of smaller brewery estates in addition to seeing the emergence of sub-500 companies operating outside code of practice or governance arrangements.

“The FLVA looks forward to a detailed statutory code of practice for all pubs leased and tenanted, tied and operating free of tie. In addition, we regard with deep suspicion any pub company that seeks to operate outside a statutory code. The task is to create a comprehensive code of practice, which together with the Pubs Independent Rent Review Scheme and Pubs Independent Conciliation & Arbitration Service can form the basis of a settlement to the issues that have doggethe pubco-licensee relationship for so long.”

Business minister Jo Swinson met recently with organisations representing licensees to discuss what should be put in the consultation into Government plans for statutory regulation and an adjudicator.

Meanwhile All-Party Parliamentary Save the Pub Group chairman MP Greg Mulholland said he is expecting that the statutory code will apply to any and all companies that own pubs above the 500 limit. This is expected to be pubcos that have any tied pubs, regardless of whether their whole estate is tied or not.