Statutory code: IFBB claims benefits worth £25K a year to licensees

By Michelle Perrett

- Last updated on GMT

Related tags: Renting, Ifbb

IFBB claims SCORFA is worth £25K per annum
IFBB claims SCORFA is worth £25K per annum
The Independent Family Brewers of Britain (IFBB) has unveiled research asserting that the average value of Special Commercial or Financial Advantages (SCORFA) to a licensee of its member companies is £25,000 per annum.

In its submission to the Government proposals for a statutory code, the IFBB, included the results of research conducted in April 2013 by an international accounting firm to collate the value of SCORFA to its members.

The results revealed that the level of property investment, other capital advantages and financial advantages was £17,000 per annum while business advice and commercial benefits come in at £8,000.

  • Property investment includes costs of building insurance which the commercial landlord will charge on as insurance rent, maintaining the structure of the premises, infrastructure of the premises including gas / water piping and electric wiring and decorating the exterior of the premises.
  • Capital investment and financial advantage include the development and maintenance of traditional tenanted premises including building extensions to new kitchens and sewage treatment plants. The landlord fund these works, provides architectural services and bears the cost of depreciation.
  •  Business advice and commercial benefits includes a range of services including business advice, beer quality, advice on menus and marketing support

In its submission the IFBB also said it rejects the central assumption in the consultation document that the current challenges experienced by tied tenants are the result of “landlords exploitative practices”.

“We continue to believe that the true exploitative force on the industry remains the Government’s tax take and burden of red tape which extracts far more from the tenant’s pocket than any landlord could do,” it said.

The IFBB also presented the results of a recent survey of 1800 tenants across 16 of its 29 IFBB members.

It found that 73% said they were happy with the level of support they received from head office, 51% believed their rent was fair while the remaining were either indifferent, or disagreed. The survey also found that 72% agreed their brewery had lived up to expectations while 83% said they would renew their agreement when it expires.

The organisation said it believes the current problems are due to a small number of licensees who took on long leases during times of economic prosperity and are now suffering due to the downturn.

In its submission the IFBB said: “There have been no reported issues with IFBB members and their tied tenants requiring mediation by the resolution service PICAS or being referred to PIRRS for rent review resolution.

"We do however within the IFBB companies, have a number of full repairing leases which again have not been subject to any complaints or referrals to PICAS or PIRRS.”

The organisation also came out strongly opposed to imposing free-of-tie on AWP machines for companies with 500 tenanted and leased pubs claiming it “will significantly distort the market place” and lead to criminal behaviour by some small independent suppliers.

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