Don't fall for the gloss, beer tie needs reform

By Simon Clarke

- Last updated on GMT

Related tags: Landlord, Reform, Brewers

Clarke: long-suffering industry
Clarke: long-suffering industry
The surface of recommended licensed trade reforms has barely been scratched, says Simon Clarke.

The surface of recommended licensed trade reforms has barely been scratched.

Those reforms that have taken place have mainly been by parties other than pubcos and big brewers — like the Royal Institution of Chartered Surveyors. There is apparent complicity with previous committee recommendations in the form of glossy codes, but they are nothing more than a veil and seek to distract attention away from matters of primacy.

We should not be distracted by codes of practice. The issue is that the beer tie, as operated by pubcos and brewers, is imbalanced and must be reformed. Granted, the last Government said this should be proceeded via an industry-wide code of practice agreed by "both sides" — that way it would not need to legislate.

Both sides did not agree a code at mediation. The Independent Pub Confederation (IPC) agreed unanimously that issues needing inclusion in the codes, if meaningful reform was to result, were being avoided by the British Beer & Pub Association (BBPA).

Upward-only rent reviews remain, amusement with prizes machine tie stays, flow monitoring is still used to fine tenants accused of buying out, mocking promises made to the BII (British Institute of Innkeeping) by the BBPA during the Code Framework "sales pitch" at mediation, the abuse of a dominant position continues and a free-of-tie option with an open-market rent review has not been offered by any tied pub-owning firm.

The real issues that should be in the codes remain absent, leaving the BII powerless to act. The problem is that, as the IPC forecast, current codes of practice are not capable of delivering adequate reform, as set out in the Government's criteria and select committee recommendations.

Contempt

The pubcos and big brewers' contempt for ministers, select committee members and tied tenants continues, albeit behind a PR machine that seeks to do little behind a flurry of apparent activity.

Government would no doubt prefer to see the trade resolve differences without referring the matter to a Competition Commission (CC) inquiry or engaging in legislative intervention. Previous committees have offered a potential solution to these alternatives. A free-of-tie option with an open-market rent review remains the only way to judge properly the fairness of the tie by allowing tenants to police their relationship with their landlords.

Without this option, CC referral is the only foreseeable lifeline for a long-suffering industry.

Related topics: Beer

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