Government intervention in pub sector should be avoided, says Fuller's boss
Government interference in the pub industry following publication of the BEC report should be avoided at all cost, according to Michael Turner, Fuller Smith & Turner chairman.
Speaking at the group's annual results presentation in London today, Turner said the last time there was major government intervention into the sector - the Beer Orders - it proved disastrous for the industry and effectively led to the situation that exists today.
"The Beer Orders destroyed the UK brewing industry as we knew it and triggered wide-scale pub sales. That legislation was not helpful and led to much of what we have today," Turner said.
"We don't need two and a half years of a government review," he added. "That will only lead to companies not investing, with tenants and ultimately consumers losing out.
"No-one wants to see a Beer Orders II. The industry has got to look at this situation really hard and come up with solutions," Turner said.
The Business & Enterprise Select Committee's report on the sector, in which it called for an overhaul of the beer tie, has raised the prospect of another government-backed inquiry into the industry.
Noting that the remit of the BEC inquiry had not included looking at the tie, Turner said that while it was "not perfect" it was at least flexible and it reacted to a variety of trading environments.
"Some individual licensees across the industry aren't getting a square deal and some are. There are lots of different agreements across the 33,000 tenanted pubs in the UK and you can't legislate [for them], because they are not the same."
It should be left to the industry to make changes based on market forces, Turner argued.
Turner, who is also chairman of the British Beer & Pub Association, would not comment on whether the industry had met with Business Secretary Lord Mandelson.
He acknowledged that "some changes" to the tie might be necessary, but would not elaborate. "People call for a franchise model to be more widespread across the industry but that is often more restrictive. The tie is quite a free model by comparison," he added.
Turner meanwhile said the group had "paid a lot more than we anticipated" for the seven London managed pubs it acquired from Punch Taverns last month.
Fuller's spent £25m on the seven sites, which include a famous Westminster pub, the Red Lion, and the Scarsdale in Kensington.
"We nominated the pubs we wanted and we got them all," said Turner. "They are perfect sites, made for Fuller's and they expand our reach into the West End of London."
Fuller's retail director Simon Emeny said the brewer wouldn't be spending a "materially large sum on the pubs", and said no more acquisitions were on the horizon.
