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Greene King lawyers urge minister to clear up stocking rights

By Michelle Perrett , 02-Feb-2017
Last updated on 02-Feb-2017 at 10:35 GMT2017-02-02T10:35:39Z

Taking stock: Greene King wants clarity from the Government
Taking stock: Greene King wants clarity from the Government

Greene King's lawyers have written to Greg Clark, Secretary of State for the Business, Energy and Industrial Strategy (BEIS), calling for an amendment on stocking rights in the pubs code.

It is thought by some industry observers that the letter could be a precursor to a potential judicial review being lodged with the courts against the Government if it fails to act. 

News of the letter came to light as a Greene King tenant, represented by the Pubs Advisory Service (PAS), received a copy of the letter as an interested party. It is understood the tenant, who has asked not to be named, had made a request for the market-rent-only (MRO) option at a rent review and requested clarity on stocking liability. 

In December, Greene King blamed the pubs code for creating “inconsistency and confusion” by omitting clarification on stocking rights. It said it believed that stocking rights were an important component of MRO agreements. 

Clarification from the pubs code adjudicator (PCA) office in its bulletin in the same month did little to make the issue clear. It simply confirmed that a stocking requirement did not mean there was a beer tie. Pubcos and campaigners had been calling for clarification on how much beer should be stocked under the pubs code. 

A Greene King spokesperson told The Morning Advertiser (MA): “Stocking rights are an important component of MRO agreements and we believe customers have a reasonable right to expect Greene King beer to be on sale in a pub that has our name over the door. 

“There is flexibility for the tenant within our agreements, both in terms of the choice of products they sell and where to buy them from. 

“The Small Business, Enterprise and Employment Act clearly identified the right of brewers to reasonably enforce stocking rights in their own pubs, and the subsequent omission of this, from the pubs code, creates inconsistency and confusion. It is important that this is now cleared up for the benefit of all parties and we have asked the secretary of state to amend the code.” 

Chris Wright of the PAS has been asking for clarification on this subject since August and said that the issue had now bypassed the PCA and had gone straight to Government. 

He said: “Greene King is after clarity and we are after clarity. I have some sympathy with Greene King’s position and the situation it is in. This gives the BEIS the chance to show leadership and we want them to listen to the trade.” 

He said that there should be a meeting where all parties can find common ground and resolve the issue of how much beer should be stocked. He said if there was any legal action against the pubs code, it could be “a long, drawn-out, turgid affair”. 

A BEIS spokeswoman confirmed to MA that the letter from Greene King had been received on Wednesday 1 February. She told MA: “The department has received the letter from Greene King’s lawyers, which we are considering. It would not be right to comment before we have had a chance to consider the matter.” 

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