Mulholland: It's pubcos that are off the pace

Two weeks ago, columnist Mark Stretton accused MP Greg Mulholland of making a vitriolic attack "unburdened by the realms of reality" on tenanted pub companies at the Morning Advertiser's Tenanted Pub Company Summit. Below Mulholland responds.

Entrenched, regressive, appalling and shocking". You would think I had insulted someone's granny and perhaps even spilt her pint.

It really is extraordinary how my presentation at the Morning Advertiser Tenanted Pub Summit has caused such uproar. The fact that my views - which are widely held

by tenants, campaign groups,

MPs and increasingly by pub customers — provoked such a reaction, speaks volumes.

There seems to be collective outrage, that someone from outside the rather closed world of the pub "industry" came in and refused to join in the rather self-indulgent

backslapping and instead told a number of people who are famed

for not listening things they didn't want to hear.

Of all the ire since my presentation, Mark Stretton's pompous piece is

the best example of this mock outrage. How absurd — as well as childish — to suggest that I should have been there for the whole summit rather than being in Parliament. I am not in the industry, I am an MP who took time out to deliver a presentation I was asked to give following a very critical Select Committee report and Government plans to legislate. Whether the "industry" likes it or not, this is a political issue.

The most notable bit of this transparently biased article was the bemoaning of the fact that the big pubcos and breweries no longer have MPs in their pockets. Yes, those days have gone — and whilst that may not be a good thing for some large pub-owning companies, it most certainly is in the interest of pub-goers, tenants and the future of the Great British pub.

But what is most annoying is the suggestion that what I was saying was factually wrong. It wasn't: the AWP tie is still in place — that's a

fact. As for the disputed figures, Punch and Enterprise alone are

taking upwards of £500m a year

out of the sector simply to pay interest. That works out at as much as £50,000 debt per pub from ill-conceived borrowing to pay over the odds for pub freeholds. 

Enterprise can celebrate, if it wishes, that its debt is a mere £30,000 per pub — but that is still a huge sum and to suggest that it is a figure to be proud of is very revealing in itself.

Enterprise support​

I also said that average support is around £2,000 to £3,000 per pub per year across the sector. Ted Tuppen was desperate to point out that Enterprise has given £30m of support over two years for 3,000 licensees. Again, just do the maths: that works out at £15m per year, which averaged across the Enterprise estate is… £2,000 per pub per year. So I was actually being over- generous!

Especially when you consider that the remaining 4,500 or so Enterprise pubs didn't get as much as a jelly-bean from this fund.

But the crux of the debate: was I right to suggest that insufficient progress has been made, or as The PMA Team commented in his comment piece, was I "woefully off-the-pace in acknowledging the changes that have been made in the past 12 months"?

No Paul, it is the big pub owning companies, who have been not only woefully off the pace since 2004 — we've had TISC, BEC, BISC. The lack of progress made since the 2004 Select Committee report was nothing short of disgraceful; the progress following the report last year only very marginally better.

Yes, since the report this year, as I made clear, some companies are now finally making some progress, but do we really think all of the 2010 Select Committee demands will be met by June next year? The reality seems to be this: the pace of progress is deliberately aimed at trying to do

just enough to avoid further action by the Government before June next year. Hardly a sprint.

The new codes have also been drawn up without proper consultation with licensees and licensee organisations, and are not legally binding. So-called free-of-tie pricing, which is nothing of the sort, sees lessees agreeing to pay an increased rent in exchange for [being] given higher beer discounts.

But if the rents on these new deals are excessive, as many fear they will be, very few lessees will take up the deals, meaning that in reality nothing much changes. It seems to many of us outside "the industry" that that is precisely the idea!

Little chance of real change​

So despite all the protestations, it still seems that there is little prospect of the kind of real change needed from within to satisfy BISC and the Government.

The question that the pubcos still won't answer is that if the current tied system was such a good one, why are the pubcos still not prepared to offer — as BISC suggested — the choice of a tied contract or a genuinely free or tie one? We all know the answer to that — and there is the crux. A truly reformed "tie" that is fair and transparent could well mean the end of much of the tenanted trade as we know it.

No wonder some people didn't want to hear what I had to say.

The PMA Team neatly summarised where we all surely want to be: "Proof of the pudding will be that tenants earn a decent profit, stay around for a decent amount of time — seven years or so on average — and report that they trust their landlord. Simple". Simple indeed, but are the changes that are being made really getting us there? Many would say no, and certainly not quickly enough.

Yes, this is personal. It is personal because pubs, including my own local pubs, are threatened by what is wrong in the tenanted trade

and the Save the Pub Group will continue to push for real change until that changes.

If there is a Tenanted Pub Summit next year, I don't expect to be invited back. But there again, by next year, the deadline for real reform will just about have passed, so perhaps we will have change — either through real reform or Government intervention — then luckily I won't need to be.