Luff: Are new Beer Orders required?

Business and Enterprise Committee (BEC) chairman Peter Luff has suggested a new set of Beer Orders may be required to stop pubs closing.

The Tory MP appeared on BBC Wales Week in Week Out show last night and hinted that the BEC inquiry into pubco power may put forward plans to dismantle the pubco model. The pubcos were created from the Beer Orders of 1989, which forced brewers to sell off pubs.

"In a sense we have come full circle since the 1989," he said. "It used to be the brewers who owned the pubs but now its the pubcos or the propcos, as I call them, owning pubs.

"This is really the one central question my committee has to wrestle with — do we need a new set of beer orders to deal with this new situation?"

He added: "I understand the problems of the pubcos and to a certain extent I sympathise with them but that must not be allowed to destroy and undermine the pubs that they actually own."

The BBC programme considered why so many pubs were closing and put the pubcos under close scrutiny. Jon Moulton, boss of private equity firm Alchemy Partners, which owns Tattershall Castle Group and Inventive Leisure, said pubcos had little flexibility to offer their tenants help and may not survive the economic downturn.

"They will either struggle through, and some are struggling, at the moment or they will go into some form of bankruptcy.

"The debt will be paid 70p in the pound from selling the freeholds and a new landlord, not the pubco, but someone else will take over.

"But they will be able to charge a lower rent because of course they have paid less for the assets."