Statutory code: Government consultation could be launched next week
The timing, though, is dependent on the parliamentary timetable, with the consultation expected to last only six weeks.
It is thought likely it will include a request for feedback on the option that a tied tenant should be no worse off than a free-of-tie tenant. This means that any pubco lease would be available free-of-tie with a rent at open-market rates.
This issue is likely to be the most controversial within the consultation document. It is expected to ask for comments on a range of issues, including the suggestion that the code covers only pubcos with more than 500 pubs, the future of the Pubs Independent Conciliation and Arbitration Service and how it might work with an adjudicator, as well as the extent of the powers an adjudicator should have.
The Department for Business, Innovation & Skills is aiming to get the new legislation mentioned in the Queen’s Speech in May, industry insiders claim.
In February, in an exclusive interview with the Publican’s Morning Advertiser, the employment relations, consumer and postal affairs minister Jo Swinson said the Government was forced to intervene in the pubco-tenant relationship after evidence showed a “stalemate” within the industry.
The Campaign for Real Ale’s (CAMRA’s) head of policy Jonathan Mail said: “The big fight will be over the tied licensee being no worse-off than the free-of-tie licensee. At the moment, the licensee takes the risk and gets little of the reward. The pubcos just have not delivered.”
Federation of Licensed Victuallers Associations (FLVA) operations director Martin Caffrey was more sceptical about a free-of-tie option.
He said: “We want to see a fair division of that profit and free-of-tie discounts coming down through the pubcos to their tenants. [But] we believe that, if tenants try to negotiate a one-off deal as a free-of-tie opera-tor, they may be in a worse position.”
He also raised concerns about the proposed 500-pub limit, which would affect just six pub companies — Enterprise Inns, Punch Taverns, Marston’s, Star Pubs & Bars, Greene King and Admiral Taverns — claiming “there should be one rule for all”.
British Beer & Pub Association chief executive Brigid Simmonds said: “We will wait and see what is in the consultation.
“While it probably will include a question about a free-of-tie option, we have real concerns about the unintended consequences of going down this path.
“It is vital for the trade that the tied model works well as a successful business model for both partners — and it is not in their interests for it to be abused. We are, therefore, fully prepared for the model to be tested as part of the consultation.”
