Fair Pint needs 'case studies'

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MP Grogan: pubcos deserve scrutiny The anti-pubco Fair Pint campaign must produce "concrete case studies" to achieve its aim — that's the view of...

MP Grogan: pubcos deserve scrutiny

The anti-pubco Fair Pint campaign must produce "concrete case studies" to achieve its aim — that's the view of All-Party Parliamentary Beer Group chairman John Grogan.

He said powerful groups like pubcos "deserve to have the spotlight shone on them from time to time".

Fair Pint, launched in Westminster last week, wants the tie removed from pubco pubs and the voluntary recommendations of the 2004 Trade & Industry Select Committee report into pubcos made mandatory.

Writing in this week's MA, Grogan said there "seems to be a lack of statistical evidence" supporting claims that the tie is the main reason for pub closures.

He pointed to figures quoted by the British Beer & Pub Association that managed and free-trade pubs appear to be closing faster than leased and tenanted sites.

"If the Fair Pint campaign is to bring results it needs

to produce more concrete case studies (if necessary maintaining confidentiality) and concentrate on persuading the new Business & Enterprise Select Committee that it should follow the advice of its predecessor committee and, in this Parliament, review the implementation of the 2004 recommendations.

"Those who have significant corporate power in our society like pubcos deserve to have the spotlight shone on them from time to time.

"For example, it was right last year that Punch had to publicly justify why it had the biggest pay gap between the boardroom and the shop floor of all FTSE 100 companies.

"It is crucial, though, that the spotlight is sharp and clear rather than blurry and distorted."

n My Shout — p12

Camra: Fair Pint campaign is counter-productive

The Campaign for Real Ale (Camra) believes the Fair Pint campaign is "counter-productive" — but supports calls for another pubco inquiry.

Camra's public affairs director Jonathan Mail said ending the beer tie would mean higher rents.

He said: "We would like a follow-up to the Trade & Industry Select Committee. We would like a legally-binding code of conduct put in place to govern the relationship between lessees and pubcos to ensure a true partnership."

Fair Pint said breaking the tie would not mean soaring rents. "Rent would be calculated by using

the industry-wide and adopted 'profit test' method," said Fair Pint campaigner David Morgan.

"This method assesses a pub's fair maintainable trade (FMT), for an average hypothetical tenant.

"The FMT is then used to calculate the gross profitability of the pub, from which the operational expenses are deducted.

"What is left over is split 50/50 between the pubco as rent and the tenant as operational profit."

FMT too high

The Guild of Master Victuallers (GMV) fears a "mass exodus" of lessees because fair maintainable trade (FMT) levels are too high. Pub rents are calculated on what the FMT at a particular pub would be if it were run by the average tenant.

But the GMV believes the FMT in many cases is "irrelevant" because of the trade downturn. "There are a lot of pubs now over 200 barrels below the original FMT," said GMV trustee Brian Rees. "I fear a mass exodus of lessees."

Delegates at the GMV conference voted to push for negotiations with pubcos to "delete or reduce" the level of FMT from rent reviews.

Meanwhile, GMV member and licensee Bill Sharp urged delegates to back the Fair Pint campaign. Sharp, who attended its launch, said he was not advocating "all-out war" with pubcos, but aspects of the tenant/pubco relationship should be looked at, including the machine tie.

Related topics Beer Legislation

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