Pubcos grilled on statutory code

Senior pubco executives were grilled on the need for a statutory code of practice to govern the pubco-tenant relationship at yesterday's meeting of the All Party Parliamentary Save the Pub Group.

The meeting provided a preview of the tussle ahead between the pubcos and the Independent Pubs Confederation (IPC) at the next meeting of the Business, Innovation of Skills Committee — expected to take place in July.

The meeting was called to discuss the progress made since the BISC recommendations in 2010 and the deadline set for June 2011.

Two panels — one made up of IPC members Fair Pint, Federation of Small Businesses, Association of Licensed Multiple Retailers and CAMRA and the other of the British Beer and Pub Association, Enterprise Inns, Punch Taverns, the BII and the Federation of Licensed Victuallers Associations — took questions from MPs.

The IPC members argued that the codes had failed to deliver and that the only way forward is a statutory code with an independent ombudsman.

"We don't think it (codes of practice) dealt with the substantial issues raised by the select committee," said CAMRA chief executive Mike Benner.

"We need to see a legal framework for a guest beer policy, open market rent review and free of tie option to help bring competition and fairness back into the market place."

Fair Pint's Simon Clarke added: "The codes address low priority points. It doesn't deal with tenant profitability and abuse of the dominant position that the tie provides."

ALMR chief executive Nick Bish said the lack of action from pubcos on free of tie had been "perplexing" and caused "confusion and disappointment".

Evolution​

However, Enterprise chief operating officer Simon Townsend and Punch managing director Roger Whiteside, defended the tied model but admitted that no genuine free of tie option was included in their codes of practice.

Instead, they said free of tie pricing options, where the licensee is offered free-of-tie beer pricing for higher rent, were available.

They also said rent reviews would be conducted in adherence to the new Royal Institute of Chartered Surveyors guidance.

Whiteside said the beer-tie has helped protect many pub businesses, as it shares some of the business risk between the small business owner and its landlord.

"I promise you the tied model has protected them to a greater degree than an unresponsive landlord who simply has a fixed rent to pay."

BBPA chief executive Brigid Simmonds said she believed that progress had been made with the code but that it should "evolve".

Meanwhile, BII chief executive Neil Robertson defended the organisations policing of the code. "We are not independent we are part of the industry. Our job is to stand up for what is right, good practice and excellence," he said.

Great success​

Chairman Greg Mulholland hailed the meeting as a great success. "It was good to get all these key individuals, companies and organisations to come along and give a clear assessment of where they believe the pub industry is with regard to the select committee and Government demands for reform.

"The question and answer session clearly established where we are, specifically that no pub company is offering a genuinely free of tie option with an open market rent review.

"It was also made clear that doing so would not be possible and would put that business model in jeopardy.

"So this will be useful going forward and it will be for the select committee to judge whether the pubcos have done what they have been asked to do."

For full in-depth coverage of the debate, see next week's Publican's Morning Advertiser out on the 16 June.​