Mixed reaction to pubco investigation

The findings of the Trade and Industry Select Committee investigation into pubcos have been received with a mixed reaction from those who gave evidence.

The report, published today, came after a lengthy investigation into the relationship between pubcos and tenants and found that ending the beer tie would not benefit tenants, claiming no one pubco or brewer held a dominant position.

However the committee was concerned that national brewers retain a stranglehold on the distribution of beer and wants the Office of Fair Trading to keep an eye on the situation.

Speaking after the report was published the Campaign for Real Ale (CAMRA) reserved the strongest criticism for the report, describing the result as a "whitewash".

Chief executive Mike Benner attacked the committee for failing to take a harder line to curb the power of pub chains and for not calling for the introduction of a guest beer for pubs owned by pub chains.

"I think the outcome doesn't really call for action on anything," said Mr Benner.

The Federation of Small Businesses (FSB), which represented licensees during evidence sessions, responded with a more positive spin and believes the pubcos will now be under close scrutiny.

"It's a shot across the boughs for pubcos," said David Bishop, deputy head of parliamentary affairs at the FSB. "There are some useful recommendations in the report. We do think they have underestimated the extent to which tenants are held over a barrel by pubcos though and still believe the relationship is flawed. But this should make it clear that the pubcos cannot get away with the arrogance which has become their hallmark."

Meanwhile the Association of Licensed Multiple Retailers (ALMR) was more positive and has seen the report as a "defining moment" for the industry.

Nick Bish, chief executive of the ALMR, said: "The report calls for no fundamental restructuring of the supply or property arrangements and the Association believes that this gives the continuity and certainty that will provide confidence to investors as well as to present and prospective lessees. "In spite of no fundamental shifts in the arrangements there are still 33 recommendations that need to be addressed: very many of these look at improving the quality of the relationship between the landlord and the tenant. The pubcos have the duty to take the lead in this and the resources to do so."

Related articles:​

Pubcos off the hook on beer tie (21 December 2004)

Committee targets BBPA code (21 December 2004)

Trade and Industry Committee criticises CAMRA (21st December 2004)

MP quizzed over report (21st December 2004)