IPC: pubcos dragging heels on codes
The Independent Pub Confederation (IPC) has raised concerns with MPs about the new pub company codes of practice that govern pubcos' relations with tenants.
The IPC accused pubcos of dragging their heels with the codes, which IPC argued don't go far enough and have created "confusion" among tenants.
The views were expressed in its submission to the Business, Innovation and Skills Committee (BISC), published today, for its investigation into the reforms made since last summer's damning report into pubcos.
IPC's submission said just two new codes had won BIIBAS accreditation for clarity within the six months agreed by BISC and by the 30 June deadline.
"The fact that both of these were smaller companies and family brewers and that none of the major pubcos or super regionals had completed the accreditation process in full is not unsurprising.
"A further five codes were approved in principle by the end of June but required further amendment to satisfy the panel.
"Even taking this partial compliance into account, this means that over 80% of BBPA members had failed to comply with this initial deadline for code accreditation."
Late submission
IPC also criticised the "very late submission" of "many" draft codes — some arriving on the final day of the accreditation process.
And the group claimed just 44% of British Beer and Pub Association (BBPA) members had their codes in place by the 1 October deadline for implementation.
"These codes cover approximately 20,000 pubs, 84% of leased/tenanted pubs within BBPA membership or 74% of the total leased/tied estate.
"In summary, therefore, whilst the majority of BBPA members have now complied with their obligations to produce and have a code accredited 28% of members still have no code accredited in full or in principle."
Despite asking BBPA in two meetings if action would be taken to encourage BBPA members to comply, "as far as we understand no activity is planned and we find this to be disappointing".
IPC also said it has "concerns" about the binding nature "or otherwise" of the codes.
It said there's "evidence" that pubcos are seeking to make the codes legally binding to the tenant but not themselves.
"We have some concern that tenants may be being asked to sign codes of practice at the time they are presented and perhaps without the guidance that legal advice should be sought."
Confusion
There's also "some confusion" about the content of the codes.
"There is some suggestion from lessees that different versions of the same company code are in circulation and that the published versions are different from the versions which have been accredited.
"This situation is exacerbated by the fact that there is no single point of reference for accredited codes."
And the IPC criticised what it sees as a lack of action in codes on the beer and machine tie.
"References have been made to free of tie prices but this is in no way the same as the provision of a genuine free of tie option accompanied by full market rent review as recommended by the Committee."
IPC says it's "too early" to determine if the codes have worked, but has suggested working with BBPA on its survey of 500 tenants and lessees to "assess code penetration".
This would take place at "regular interviews", the first by the end of the year.
However, IPC is discussing internally whether a "more qualitative assessment" of how codes are being implemented and the effects they are having can be undertaken "separately or in tandem".
Benchmarking rejection
Meanwhile, IPC said it offered to share ALMR's benchmarking data of pub running costs with BBPA at a meeting in June, but the offer was rejected.
"We understand that the BBPA will be carrying out its own benchmarking exercise in order to produce a sample profit and loss account for use by members.
"We understand that this exercise will not seek to collect actual information on operating costs but will instead seek approval or support for a range of assumptions on costs.
"In light of this, lessee groups will continue to work to collate benchmarked averages derived from the accounts of actual pubs."
Elsewhere, IPC says the revised guidance on rent setting from the Royal Institution of Chartered Surveyors "does fairly represent a step forward if it is implemented in good faith and in the form that it currently takes, without further amendment".
Last week, Adrian Bailey, chairman of the BISC, told the Morning Advertiser that he did not feel the problems in the industry were being "sufficiently addressed".
More on pubco progress
• BBPA: 98% of pubco codes accredited
• BII to strengthen support for new pub tenants
