Statutory code: Parliamentary motion welcomes the launch of consultation

The group has welcome the fact that the Government has committed​ to enshrine the principle that the 'tied licensee should not be worse off than a free of tie licensee'.

The Save the Pub Group (STPG) is calling on all current and former tied licensees​, pub customers and communities who have seen the effect of the pubco model, to write to the consultation backing the market rent only option and a fair deal for their local.

STPG chair, Liberal Democrat MP Greg Mulholland, said: “All too often, the large pub owning companies systematically take more from pub profits than is fair or sustainable which prevents licensees making a decent living and has closed thousands of pubs.

“So having campaigned for much needed reform since our formation four years ago, the STPG warmly welcome the new consultation for a statutory code of practice that will enshrine into law the important but long ignored principle that the tied licensee should not be worse off than a free licensee, the question is how best to do this.

“We firmly believe that the best and indeed the only realistic way to deliver the Government’s intention is to give tied licensees of larger companies the option of paying fair market rent only to their pubco.

"This would ensure that the tied model, which the leased pubcos have skewed and abused, would work as it is supposed to, with a fair split of pub profits, which does not happen at the moment. It is time for a fair deal for our local pubs”.

STPG vice chair, Conservative MP Brian Binley and member of the Business Innovation and Skills Committee (BISC), said: “The BISC and predecessor committees have looked into this serious problem no less than four times in eight years and clearly concluded that legislation is required to stop the endemic overcharging that the committee showed stops licensees making a fair living.

"Our investigation showed that 67% of lessees of tied pubs said that they earned less than £15,000 per annum. Even where pubs had a turnover of more than £500,000 a year, over 50% of lessees earned less than £15,000.

“It is the large pub owning companies who distorted the traditional brewery tied model that must now be tackled and it is right therefore that the family brewers will not be covered by the new code which will apply to all companies with 500 or more pubs.”

STPG vice chair, Labour MP Grahame Morris said: “MPs from all round the country and in all parties are sick and tired of hearing of how large pubcos have been taking more than is fair or sustainable from pub profits. Many licensees are unable to even earn the minimum wage, despite having a decent turnover.

“The STPG are relieved that at last the Government has said it will tackle this market abuse. We welcome the consultation on the statutory code. However, it is what is in the code that really matters and it must include the Select Committee recommendation of a market rent only option and we will be working with CAMRA, business and licensee organisations to ensure that this is included so abuses of the tie by some pubcos finally becomes a thing of the past."

"That this House welcomes the launch of the consultation to determine what will be in the forthcoming statutory code of practice for large pub companies; notes that the code has become necessary as large companies continue to take more than is fair or sustainable from pub profits in both inflated product prices and excessive rents which is causing the failure of pub businesses up and down the country; further notes that self-regulation failed and did nothing to address the overcharging; welcomes the explicit commitment to enshrine in law that tied licensees should be no worse off than free-of-tie licensees; believes that the way to deliver this is an option for tied landlords of large companies to pay an independently assessed market rent only to their pub owning company and that this should be offered alongside tied agreements; further notes that this is the solution put forward by the Business Select Committee, chaired by the hon. Member for Mid Worcestershire; further notes that this is not abolishing the tie, but making the tie work as it should, which is that if a licensee pays higher product prices they then pay a correspondingly lower than market rent which is currently not the case; further notes that this is supported by small business organisations, the Federation of Small Businesses and the Forum of Private Business as well as the Campaign for Real Ale and licensees' organisation; and supports the commitment to protect the family brewers by applying the code only to companies that own more than 500 pubs."