Fair Pint and BBPA lock horns on Radio 4

Anti-pubco group Fair Pint and the British Beer & Pub Association (BBPA) locked horns today over the pubco model during a debate on BBC Radio 4.

Fair Pint member Steve Corbett, licensee of the George Canning in South-East London, and Mark Hastings, communications director of the BBPA, whose members include most major pub companies, traded views on why five pubs a day are currently closing, on the Your and Yours programme.

Corbett argued it was increasingly difficult for tied tenants to compete with freetraders now, because their balance sheets were the same, but tenants "pay two to three times more for their beer".

"My gross profit is now 46-47 per cent, the cost is unsustainable," he said.

However, Hastings claimed the tied model was "far more robust" than the freetrade model and pointed out it was not just the pub trade that was suffering.

"More than half of pubs shutting are freetrade," he said.

Pubcos are spending millions of pounds on supporting their licensees, Hastings claimed, suggesting it was in their interest to keep pubs open. "When pubs are not selling beer the pubcos' income is suffering," he said.

Corbett said there was "no need for the beer tie". "Pubcos have no interest in the pubs , they are only interested in the profits," he said.

He added: "If I can survive until January, I will have done well."

Pub trade analyst Paul Hickman was asked by presenter Peter White, who until recently owned a pub, which is now a tapas bar, if he thought pubcos could survive in the current climate.

He replied: "I believe these companies can survive, but the prospects become less attractive for their equity shareholders."

Later this month an MP-led parliamentary review of pubco power kicks-off. An Enterprise lessee, Fair Pint and the Federation of Small Businesses are among those invited to speak at the first session on Tuesday, November 18.

The pubcos - likely to be Enterprise Inns and Punch Taverns - are due to have their chance to respond on December 9.