Pubco inquiry kicks-off today
The first oral evidence session of the Business and Enterprise Committee (BEC) inquiry into the pubco-tenant relationship gets underway today at 1030am — and the MA will bring you unrivalled coverage.
The committee is reviewing what progress has been made since the 2004 Trade & Industry Select Committee (TISC) report.
First up will be the Fair Pint campaign group, which wants an end to the beer tie. The group has powerful backing in the form of music mogul Vince Power.
Meet the speakers
Ahead of the first session, we give you a brief introduction to today's speakers and what they are likely to say.
Brian Jacobs, Fair Pint: Jacobs is a pubco inquiry veteran, having been heavily involved in the 2004 TISC inquiry. He is a trade accountant with 50 years experience. Fair Pint wants an end to the beer tie. Likely to take issue with the way rents are set.
Clive Davenport, Federation of Small Businesses (FSB): Davenport is the trade and industry chairman at the FSB. Evidence from the FSB, which counts several thousand pubco tenants as members, led to the 2004 Trade & Industry Select Committee Inquiry into how pub companies treat licensees."We are very pleased to see the Business and Enterprise Select Committee inquiry into pubcos re-opened," he says.
Paul Daly, Enterprise lessee: Daly owns both an Enterprise lease, Road Trip, and a freehold, Zigfrid, both in the East End of London. "I am shocked at how the pubcos have been able to get away with the way that they have been treating their tenants for so long," he says. "I cannot believe the difference in prices that I have to pay for beer in my tied pub compared to my free-of-tie pub. The price I am quoted by my pubco for Carling is 61% more expensive, and Grolsch 55% more, than what I could achieve at my free-of-tie premises. The pubco model is simply not sustainable."
David Morgan, Cookseys DMP: Morgan has been involved in licensed trade property for 34 years and he is a fellow of the Royal Institute of Chartered Surveyors (RICS). Morgan has become the scourge of the pubcos, taking up many rent review cases. He will argue that rents should be set using the profits test method and that pubcos wildly over-estimate the Fair Maintainable Trade (FMT) and fail to give clear written evidence of how rents are calculated. He also takes issue with the RICS guidance for valuers which does not include the most famous line from 2004 — "the tied tenant should be no worse off than if they were free of tie".
Simon Clarke, Enterprise lessee and chartered surveyor: An unusual combination which served Clarke well in taking on Enterprise at arbitration and winning. He secured a 12% rent reduction at his pub the Eagle House in Battersea, which he runs with David Law. Read more on his rent reduction here.
Martin Willis, Valuations Group chairman, Royal Institute of Chartered Surveyors (RICS): Willis is also managing director of Fleurets and joined the firm in 1984 after spending four years at Bass and six years at the Inland Revenue Valuation Office prior to that. He has acted as an expert witness in rent reviews on a number of occasions. Recently took over from Rob May as the chairman of the Valuations Group, which writes guidance for valuing licensed trade properties. Will probably face some tough questions over why the RICS guidance does not specifically state that the tied tenant should not be worse off than the free of tie tenant.
• To watch the hearing click here at 1030am.
• Click back here later today for all the news and reaction from the first hearing.
