Pubco reform campaigners to present letter to David Cameron

By James Wallin

- Last updated on GMT

Related tags: Pub business, David cameron, 10 downing street, Beer

Campaigners will present a letter to David Cameron calling for reform
Campaigners will present a letter to David Cameron calling for reform
The Government is being lobbied from both sides of the debate on pubco reform this past week, as anxiety grows over whether legislation will be announced in this Parliament.

The Fair Deal for Your Local campaign will today present a letter to David Cameron at 10 Downing Street asking him to deliver reform.

Steve Kemp, from the GMB Union, which is a member of the Fair Deal for Your Local campaign, said an announcement was expected from the Business, Innovation and Skills Committee imminently, and could even be before Parliament breaks for Easter.  

He said: “GMB is campaigning for Option 3 in the statutory code. This will offer tied tenants the ability to buy products from the open market and pay a fair market rent for the building.

Unfair

“Interest payments on the huge pubco debts have to be paid each week before the tenant pours a pint and regardless of whether s/he can make ends meet or not.

“To pay these sky high rents a pint of lager is on average 80p per pint higher and ale is 65p per pint higher than justified by inflation and like for like changes in taxes since 1987. This is pricing pubs out of the market and they have closed in droves.”

“The common view that shareholders in the pubcos own a pub business is wrong. In fact the shareholders don’t own a pub business; they own a holding company which invests in and manages incomes from pubs- these are called pub securitizations.

“These securitizations are the infernal machine that is closing pubs across the country. It is the same infernal machine that drove Southern Cross care homes to the wall.”

Undermining

However, Brigid Simmons, chief executive of the British Beer & Pub Association wrote to MPs urging them not to undermine the positive announcements contained in last month’s budget by meddling in the industry.

She wrote: “As the Government considers further regulations governing landlord/tenant relations – including a possible mandatory free of tie option I would point out that the Office of Fair Trading in their recent advice to BIS found that ‘the mandatory free of tie option would be likely to result in pub companies losing some of the economies of scale that are currently achieved through centralised purchasing which could in turn result in higher beer prices for tied lessees, which may be passed on to consumers.’

“We would not want to see the very real benefits of two welcome beer duty reductions being undermined at this critical stage by further costly and unnecessary regulations which London Economics warned BIS would result in as many as 1,600 additional pubs closing.

“Thank you again for the much-welcomed beer duty reduction and other measures in the Budget to support pubs. There are encouraging signs of renewed confidence within the pub sector and we very much hope you will help us oppose any measures which could undermine this recovery.”

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