Pubco-probe MP queries tie reform

By John Harrington

- Last updated on GMT

Related tags Adrian bailey Pubs independent rent Pub companies

Pubcos: under scrutiny from MPs
Pubcos: under scrutiny from MPs
The MP heading the on-going investigation into pubcos says he doesn't feel problems in the industry are being sufficiently addressed. Adrian Bailey,...

The MP heading the on-going investigation into pubcos says he doesn't feel problems in the industry are being sufficiently addressed.

Adrian Bailey, chairman of the Business, Innovation & Skills Committee (BISC), also questioned the findings of the Office of Fair Trading (OFT), which has once again given the beer tie a clean bill of health.

BISC is expected to hold hearings with pubco chiefs and anti-tie campaigners at the start of next year as part of its investigations into progress made since last summer's damning Business & Enterprise Committee report into pub companies.

Key areas to be studied include the new pubco codes of practice, the Pubs Independent Rent Review Scheme (PIRRS) and the updated guide on rent setting from the Royal Institution of Chartered Surveyors.

Bailey told the Morning Advertiser​: "I still have concerns about the operation of pub companies as were articulated in the previous report, and the one previous to that (2004's Trade & Industry Select Committee Report).

"I still don't feel issues are being sufficiently addressed. The fact that day by day we are seeing pubs close indicates there are significant problems in the industry.

"What proportion of the reduction in the number of pubs are due to issues around the tie is something we wish to address."

Bailey's comments suggest trade chiefs have a big task ahead to convince the Committee that its recent actions have had a positive impact.

Deadline for change

BISC's views are expected to carry a lot of weight with the Government, which will decide what action to take after the June 2011 deadline for change.

Earlier this month the OFT ruled that the pub sector "is competitive overall" in re-sponse to the Campaign for Real Ale's (CAMRA's) request that it re-examines the tie.

Bailey said: "I have to say the conclusion of the OFT didn't actually address the real issues. It may well be between pubs there isn't huge competitive disadvantage. But the significant issue is the competition between pubs and the supermarkets.

"If the tie is exacerbating a problem that exists anyway, that's an issue we need to get evidence on."

Bailey said the Committee would "need to examine" the OFT — or its successor if the competition body is folded by the Government — as part of its investigation.

The Labour and Co-operative MP for West Bromwich West said there's "no time-table" for oral hearings to take place, although they will feature "both sides of the industry, the representatives of different organisations and campaigners".

BISC's report for the Government is expected in "April or May", Bailey said, to give ministers time to respond.

Related topics Legislation

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