Speaking at a Save the Pub Group committee meeting in Parliament last week Mulholland, who is chairman of the group, argued that it is now time for the Government to fix the issues created by the orders — which limited the number of pubs owned by breweries. The result was the creation of major pub companies such as Enterprise Inns and Punch.
Mulholland told MPs present at the meeting “it (Beer Orders) has proved to be a complete disaster.”
He said he expected the Business, Innovation and Skills Committee report, due imminently, on the sector to suggest reform of the beer-tie. He argued it is now time to free the pub sector from the current pub ownership structure which he claimed “has stifled” the sector and which “strangles and destroys entrepreneurship, innovation and flair.”
However, the pub sector had seen some success stories despite the difficulty of the recession and the challenges represented by the beer-tie, he claimed.
“There are increasing examples of pubs which have been going through a bad time for a period or indeed for a long time which are being taken on and bought from the large pub owning companies,” he said. “They are being rejuvenated and transformed in terms of business potential. l think it is a very exciting development.
“Good pubs that offer customers what they want will succeed even in difficult times.”
There is a problem, however, in the lack of protection for pubs under planning law. He raised concern about “restrictive covenants by the back door” — where a pubco instructs an agent not to sell the property as a pub.
He is also concerned about “predatory purchasing” where a viable pub is sold for alternative use. He believes this is becoming more common as the major pubcos, who are in debt, are willing to offload viable pubs because they are offered good money for the site.
Bill Sharp, chairman of the Independent Pub Confederation and licensee of the Kings Arms in London Bridge, claimed some pubcos are continuing to miss-sell leases to potential licensees.
He gave an example of one licensee, who went to a roadshow and was offered a pub next to Guys Hospital in London.
“They said to her the pub is just near the hospital and you have got 3,600 medics in their drinking day and night,” he said. “What they didn’t tell her was they have got a million pound bar in the hospital where they can buy a pint for £1.50. There are people at roadshows not telling the whole truth.“
He said that he hoped the BISC committee would take action but said it was unlikely to be enough.
“There is no light at the end of the tunnel for these licensees. The only way people are going to make a living in this game is the product has to be sold at a fair price to earn a fair living."
Meanwhile, Federation of Small Businesses trade and industry chairman Clive Davenport said the joining together of pub trade associations has been the “most heartening” change in the industry over the last four years.
Davenport said the move had created “a realistic positive response” to the treatment the pubcos have been “shelving out with impunity”.
The FSB currently has 4213 publican members — which is on the increase — is concerned that its recent research revealed that 70% of its publican members claim the pubcos Codes of Practice are not making any difference.
He said: “I feel we are in a position where we are not being listened to and that is very distressing.”