A statutory code could see a new beginning for the trade

By Simon Clarke

- Last updated on GMT

Related tags: Statutory code, Renting, Royal institution of chartered surveyors

Clarke: "Evolution of exploitation has kept pace with any foreseeable change until now"
Clarke: "Evolution of exploitation has kept pace with any foreseeable change until now"
Left with the choice of ‘play fair or don’t play’ the pubcos and brewers have gone into overdrive in trying to limit what might come to pass, says Simon Clarke.

Attempts to dilute the Government’s proposal, outlined in the public consultation, have accelerated.

One proposal was that pub-owning companies with 501 pubs, and only one tied/tenanted, would still need to treat their tenant in accordance with the statutory code. It would discourage a simple property swap of pubs back into the hands of brewers.

Pressure is building for the proposed statutory threshold to be applied only to pub-owning companies with more than 500 tenanted and leased pubs.  A company could own 6,000 pubs, 499 of which are tied, and still slip under the radar of statutory regulation — a nifty side-step.

Some family brewers are threatening to cease brewing if the free-of-tie option comes to pass.

Leaving aside the fact there’s no proposal that any of the 30 small family brewers should have to comply with the statutory code, surely the sum of their argument can not really be that if they have to play fair they can’t survive. How many times does it need to be said? It’s not the option that determines the future of the tied model it’s the tied agreement terms.

Fire fighting

The proposal to do away with upward-only rent reviews in free-of-tie agreements is meeting with huge resistance not just from the obvious, like Wellington, but from the other pubcos too.

Upward-only rent reviews in free-of-tie agreements are the stick with which they hope to beat licensees away from the free-of-tie option.
The pubcos’ game is to avoid the worst, fire fighting possible outcomes. The Royal Institution of Chartered Surveyors’ (RICS) rental valuation guidance was slithered around by a few ‘place men’ high up in RICS’ HQ.

New planning restraints are laughed at by aggressive developers, who strip a pub on acquisition, knowing that planners are reluctant to take enforcement action.

The best way for pubcos to avoid effective regulation is to make up their own — reinforce the ‘self-regulatory regime’. To undermine Government plans and dilute their effect is their next challenge and the machine is in full swing. Evolution of exploitation has kept pace with any foreseeable change until now.

A statutory code, with a mandatory free-of-tie option, and an adjudicator with powers of review and amendment of the code, could see a new beginning.

Simon Clarke is a licensee and member of the Fair Pint campaign

Related topics: Legislation

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