BISC confirms pubco-tenant inquiry

By Ewan Turney

- Last updated on GMT

Related tags: Beer, Government, Pub companies

Pubcos: under scrutiny
Pubcos: under scrutiny
The Business, Innovation and Skills Committee (BISC) has confirmed it is to reconvene to look at whether a statutory code of practice is required.

The Business, Innovation and Skills Committee (BISC) has confirmed it is to reconvene to look at whether a statutory code of practice is required to govern the relationship between tenants and landlords in the pub industry.

The Publican's Morning Advertiser first revealed the committee was due to review progress made by the pubcos last month following the inquiries of 2004, 2009 and 2010. However, BISC has not yet confirmed a date for the meeting or who the speakers will be. Written submissions have to be in by 20 June.

It will look at:

• If the BBPA and IPC are now in dialogue and if so how this is progressing;

• Whether the Pub Companies' individual Codes of Practice are robust enough and whether the major pub companies have built upon the de-minimus requirements of the BBPA's Framework Code;

• If the Codes of Practice are being complied with;

• How the BII is policing the codes and whether this is effective;

• The enforceability of the codes;

• If AWP machines are now being treated more fairly and tenants are being given a genuinely free of tie option;

• The treatment of flow monitoring equipment;

• The advice being provided by BBPA to prospective publicans;

• The effectiveness of the new RICS guidance on pub rental valuations and whether it provides clarity on the principle that a tied tenant should be no worse off than a free of tie tenant by defining what constitutes a countervailing benefit;

• The creation of an industry benchmarking survey;

• The availability and effectiveness of complaints procedures and an independent disputes mechanism;

• The availability of genuine free of tie options ie an open market rent review under RICS new guidelines, ability to buy beer from any source; and

• The guidance from BII on the type of pub leases available and what the options mean in reality to prospective lessees. This includes free of tie, tied pricing and discounts as well as the business support countervailing benefits available.

"Our predecessor Committee made clear that this was the last chance for the pub companies to 'get their house in order'. Our inquiry intends to find out if they have," said Adrian Bailey MP, chair of the Business Innovation and Skills Committee.

"The British pub is an important institution which not only provides a social meeting place but also plays an important cohesive function in many communities. We do not want to see any more pubs closing unnecessarily."

Government backing

The BISC recommendations received backing from the previous Labour Government and the Coalition.

Pubs minister John Healey, of the Labour administration, went further than the recommendations, and said: "Government gives the industry until June 2011 to improve. If the Business, Innovation and Skills Committee concludes by then that the Code is not working as well as it should we will consult on putting the Code on a statutory basis with effective enforcement.

"The Code of Practice should also incorporate a beer/non-beer tie option for tenants with a commitment that the Government will act if the industry does not.

"In addition the industry should introduce voluntary provision for tenants to offer a guest beer outside the traditional beer tie as part of the code with Government action to introduce an order if industry fails to act."

Business secretary Vince Cable said the Coalition would continue with that policy. "I think the commitment is to give them until 11 June and if they have not delivered a more satisfactory arrangement then there will have to be legislative action," he said.

Written evidence

Written evidence in connection with the inquiry should be sent to the Committee by Monday 20 June 2011.

These should be sent, in MS Word or rich text format — NOT pdf format — of no more than 2,000 words, by e-mail to ovfpbzzrz@cneyvnzrag.hx​ with a single hard copy sent to the Clerk of the Committee at Business, Innovation and Skills Committee, 7 Millbank, House of Commons, SW1A 00A.

Submissions should be in the format of a self-contained memorandum. Paragraphs should be numbered for ease of reference, and the document should, if possible, include an executive summary.

Submissions should be original work, not previously published or circulated elsewhere. Once submitted evidence is the property of the Committee and should not be published without the Committee's consent.

The Committee will usually publish evidence it receives, both in printed form and on the Internet. If you wish your evidence to remain confidential, please contact the Committee staff. Before submitting evidence, please read the guide to submission of written evidence at: http://www.parliament.uk/bis ​.

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