New pubco code promises "transparency
Current and would-be licensees are being promised more "transparency" from pubcos, after an agreement on industry best practice was reached.
The British Beer & Pub Association (BBPA) today unveiled full details of a new framework code, that all its members are expected to comply with by May.
The code is a result of pressure on pubcos after a battering from MPs in last year's Business and Enterprise Committee report.
The BBPA said the code "significantly increases" the amount of information prospective lessees and tenants will get from pubcos.
Upward-only rent reviews should also become a thing of the past, as the code says clauses in leases will be "capable of upwards and downwards reviews".
On the thorny issue of restrictive covenants, it does not rule out companies still employing this tactic. However pubcos will have to make their policy on the issue "clear".
Pubcos will also have to clearly set out the support and guidance any business development manager (BDM) is expected to offer.
Would-be licensees will also have to undergo training to make sure they understand the full implications of the lease they are taking on.
And anyone buying an assigned lease from an out-going licensee must receive the same amount of information as somebody taking on a lease direct from a pubco.
BBPA chief executive Brigid Simmonds said the group was "delighted" to reach an agreement on the code with the BII and Federation of Licensed Victuallers Associations.
"We look forward to seeing the revision of company codes in the coming months, to reflect the challenging and robust set of reforms we have all agreed," she added.
However anti-beer tie group Fair Pint criticised the BBPA code, claiming there was nothing in there that would "improve the position of suffering publicans".
A spokesman added: "The BBPA has offered nothing but a codification of things which it should be expected that good companies would have done anyway.
"Pub companies have a record of ignoring their existing codes of practice and the lack of real sanctions for this code means that they will be free to ignore this one as well."
CAMRA also attacked the code. A spokesman said: "We are disappointed that the code is not legally binding; ignores the principle that tied publicans should be no worse off as a result of being tied and does not introduce a guest beer right.
"The code also fails to commit companies to cease the indefensible use of restrictive covenants to prevent competitors re-opening closed pubs.
"This Code signifies the failure of the industry to respond to legitimate competition concerns and merely serves to highlight the need for swift action by Government and Competition Authorities."
Pubcos will have to submit their revised code to the BII for accreditation and the whole process is expected to be completed by the summer.
