FPB: pubcos holding tenants to ransom

The Forum of Private Business (FPB) has called for stronger regulation of the pub trade claiming pubcos are holding tenants to ransom.

This is the first time the FPB has waded into the beer-tie debate, following on the heels of the Federation of Small Businesses and other organisations such as the Independent Pub Confederation.

The business support organisation, has written to Adrian Bailey MP, chairman of the Government's Business, Innovation and Skills (BIS) Committee, detailing the experiences of its pub tenant members — including those who have complained about the 'heavy handed and unfair treatment'.

The Forum is calling on the Government to strengthen pub industry regulation to ensure that pub companies comply with codes of practice. It has also requested that a tied tenant should be no worse off than a free of tie tenant, that an independent disputes mechanism is created and wants more pub leases to be available offering free of tie products.

It is particularly concerned that pub companies give preferential treatment to new tenants by giving them discounts on alcohol and other products. The Forum believes similar discounts should also be available to existing leaseholders so that they can compete on price.

"The first BIS Committee inquiry took place in 2004 so pub companies have had seven full years to improve their treatment of tenants but little progress appears to have been made during this time," FPB chief executive Phil Orford said.

"If we are to reduce pub closures the abuses of power by companies over individual tenants must be curbed by stronger statutory regulation, and these codes of practice must be enforced as it seems not all companies are complying. For example, evidence from our members suggests that grant concessions are not being given to struggling lease holders.

"In a deregulatory environment, this is one area in which better regulation could be used to support and protect small businesses."