FLVA supports statutory code move

One of the key signatories — and the only tenant body — to the industry voluntary code of practice framework has said the system is not working and must be replaced by a statutory code.

The Federation of Licensed Victuallers Associations (FLVA) was seen as giving significant credence to the voluntary code, which is the pubcos basis for reform, when it signed up in the wake of the failed industry mediation process.

The other tenant associations — Fair Pint, Guild of Master Victuallers and Association of Licensed Multiple Retailers — refused to sign the code and instead formed the Independent Pubs Confederation.

FLVA president Nigel Williams told the All-Party Parliamentary Save the Pub Group meeting, chaired by Lib Dem MP Greg Mulholland, the FLVA had signed up to the code of practice in the knowledge that it was a "starting point" and that it had made a difference in the areas of training for new tenants and in a new range of lease options.

Tenant profitability​

But he said it had done little to improve the profitability of existing tenants and the FLVA had seen some "horror stories" over the past year. It had helped secure additional benefits or rent or beer discounts worth £1m for tenants over a total of 50 cases.

"Yes, the code of practice is a start but I don't see anywhere where the code of practice has gone further than they need to go. At best they have gone just far enough," he said.

"The problem with the code of practice is they have really tied up the recruitment process and that has slowed down so the number of new deals is probably much lower than expected.

"So we still have a huge raft of lessees and tenants struggling under the new regime and in the face of new tenants coming into the market with much enhanced deals."

Free of tie​

Williams said the free-of-tie options, where pubcos offer free of tie pricing in return for increased rent, was just a way "to protect the landlord's rent roll against falling barrelage" and any tenant taking a current free-of-tie option would have to "significantly" out-perform the Fair Maintainable Trade year-on-year.

Williams questioned whether the code of practice messages, spoken about by Punch managing director Roger Whiteside and Enterprise Inns chief operating officer Simon Townsend, where "getting through to the troops on the front line".

"The codes are close to the minimum in a lot of areas but I don't think it addresses free of tie at all," he told the meeting.

Statutory code​

When asked if a statutory code was now required, he said: "Yes, a statutory code is probably the only way to get a long-term solution. Until we get some very strict code of practice enshrined within the lease I think we will be batting on a very sticky wicket for some time."

However, the FLVA stil has some reservations about joining the IPC.