Statutory code: Trade responds to Government proposals

By James Wallin contact

- Last updated on GMT

Related tags: Statutory code, Public house

BBPA chief executive Brigid Simmonds said it was a "huge relief" there was no mandatory free-of-tie element to the code
BBPA chief executive Brigid Simmonds said it was a "huge relief" there was no mandatory free-of-tie element to the code
Leading figures in the pub trade have responded to the Government's plans to introduce a statutory code governing the pubco/tenant relationship.

Brigid Simmonds, chief executive of the British, Beer & Pub Association​: “While we are disappointed that the Government has decided to introduce legislation, and particularly about the disproportionate cost of an adjudicator – £1.8m a year – this has at least given the industry some certainty.”

She added: “And it is a huge relief that the Government has decided not to include mandatory free-of-tie or guest-beer options, which could have had some serious unintended consequences.

“The ability for tenants of the bigger pubcos to apply for a free-of-tie rent assessment for £200 when a free of tie option is not available, does seems strange.

“There is as yet no code attached to this announcement. We hope it will be based on our code [Industry Framework Code version 6], and that we will have the opportunity to work with the government on this.

“We’ve done some more work with our members on behavioural changes, and can offer that up for consideration.”

Simmonds said that she expects PIRRS and PICAS to continue operating until the new adjudicator is in place, which could be 18 months.

Kate Nicholls, strategic affairs director, Association of Licensed Multiple Retailers: ​“We are pleased to see the Government has finally set out its position on the relationship between pubcos and their tenants. This brings to an end a long period of uncertainty which has undoubtedly hampered investment in our sector.

“We are particularly pleased to see the Government addressing the issue of rent reviews and also recognising the hard work that has already been done by the ALMR and other trade bodies working to find a voluntary solution. In the interim, the voluntary scheme must remain robust and effective to ensure that this work is not undermined.

“It is critical that definitions and classifications within the statutory code are robust, clear and meaningful to ensure transparency and simplicity for the sector going forward. The contents of the draft code will need to be scrutinised to make certain that it has the capacity to deliver the meaningful change licensed hospitality needs.

“The sector needs stability and consistency to ensure a fair, free and flexible market and the continued ability to promote jobs and growth right across the UK.”

Tim Hulme new

Tim Hulme, chief executive at the British Institute of Innkeeping (BII):​ "I welcome the clarity the Government response finally brings, and the fact it supports many of the points made by our members in the submission we made on their behalf. For the first time, this brings parity to tenants at risk of unfair treatment and importantly, it levels the playing field for all tied tenants in their relationship with their landlord. My team and I eagerly await details on the exact wording of
 both the Statutory Code and enhanced Statutory Code for companies with over 500 tied pubs, and confirmation of the process for appointing the independent adjudicator.
 "Inevitably, the detail which underpins today's announcement will be telling and I sincerely hope that the work on a Universal Industry Code of conduct led by the late Bernard Brindley isn't overlooked."

Tom Stainer, head of communications, the Campaign for Real Ale (CAMRA)​: “We are delighted that after our 10 year campaign the Government is now introducing a Pubs Adjudicator to protect the nation’s pubs. With 28 pubs closing a week it is vital that publicans, who are on the frontline of keeping our valued community pubs open, are given protection from heavy-handed business practices from the big pubcos.”

“Publicans could see the price they pay for beer fall by up to 60p a pint if the Adjudicator forces the big pubcos to match open market prices. A 60p a pint saving would be a huge boost in the battle to keep pubs open and could lead to cheaper pub prices for customers.”

“While we urge the Government to go further by introducing guest beer and market rent only options for tied publicans, today’s announcement is great news for publicans and pub goers alike. Over the last decade many thousands of pubs have been lost as big pub companies have squeezed them out of existence with sky-high rents and beer prices.”

Martin Caffrey, operations director, Federation of Licensed Victuallers Associations:​ "We are pleased that the period of uncertainty is over. We have always sought a single detailed universal code which is comprehensive in its content and transparent to all, we eagerly wait to see the content of both the core and enhanced code and remain of the opinion that good legislation is good legislation for all.

"There are many good things that have been introduced by the voluntary code, namely PIRRS and PICAS, which should not only judged by the number of cases brought forward for deliberation by them, but more importantly by the number of resolutions brought about by the existence of these bodies without the need for direct referral. These institutions and the tasks they undertake must not be the proverbial baby thrown out with the bathwater. The work carried out by these 2 bodies and the further strengthening of a system which rebalances the relationship between pub owning companies and their tenants must continue in this period until legislation is introduced and beyond."

Julian Grocock, chief executive, Society of Independent Brewers:​ “On first reading, the Government’s proposals for a new statutory code governing pub companies’ relationship with their tenants appear commendable. This is a measured, pragmatic response that shows they have listened to the many voices across the industry and taken a balanced view.

“The code sets out a sensible structure to put an end to unfair treatment of tenants, without tearing up the pub tie in the process.  The tie has proven to be an effective business model for centuries and the Government has, we believe, acted wisely by not throwing the baby out with the bathwater.

“We hope that the Government’s decision will restore stability to the pub industry and encourage more investment, after many years of uncertainty.  It should lead to a more confident pub sector, which is good news for the 800 or so SIBA brewers who are reliant on busy, thriving pubs to sell their beers.”

Toby Perkins MP, shadow small business minister: ​“Labour has led calls for a statutory code to give local pubs the protection they need and to ensure landlords get a fair deal. Any action to help pubs is welcome, particularly after ministers have dragged their feet for more than three years during which time hundreds of publicans have lost their livelihoods.

“The changes ministers have announced today do not include a free-of-tie option or the genuinely independent rent reviews which Labour and campaigners have been calling for. Specifically, it is hard to see what the parallel rent assessments will actually deliver. Labour will work to ensure the Code has sufficient teeth to ensure it makes a genuine difference for publicans.

“We are pleased that the government have now accepted many of the arguments that they have been voting against in three Commons votes, however we fear that the watered down version the government appear to be offering will not affect the changes that can prevent the large increase in pub closures we have seen in the last year.

“We will assist the government to get a statutory code on to the statute book as quickly as possible and work to ensure that it safeguards the future of the industry by delivering the real change publicans have been calling for.”

Adrian Bailey MP, Business,

AdrianBailey1

Innovations & Skills Committee (BISC) chairman:​ “The Government has responded to the BIS Select Committee report with a raft of measures designed to strengthen the industry code and the rights of tenants to appeal.

“It falls short of the key demand to give all tenants a free of tie option coupled with an open market rent review. The implication is that there will be legislation will be proposed within the Queens speech.

“Labour has committed itself to the latter. This will no doubt be a debate when legislation is put before Parliament. As is often is the case the devil will be in the detail. Alongside my fellow committee members I will be probing this as legislation progresses.”

Simon Clarke of the Fair Pint Campaign:​ "Confirmation in the Queen's speech that the pub industry will finally have a statutory code and an adjudicator could see a new beginning for the prospects of the Great British pub. The codes terms need to be 'meaningful and material' as promised by the Government and the adjudicator truly independent of undue influence by the rapacious companies that have brought the pub industry to this sorry state of affairs today.

"What British pubs need is the flexibility to enable them to evolve to the changing demands of a modern society. Archaic contracts need to be capable of amendment to render unfair terms unenforceable and I welcome that the coalition Government have realised that only strong legislation supporting their own primary objectives- of fairness and ensuring a tied tenant is no worse off than if they are free of tie- will offer a brighter future from the spiraling decline of pubs in this country. A strong code will inject confidence and attract entrepreneurial flair and be the catalyst for a pub revival."

Steve Kemp, lead officer for tied pub tenants, GMB:​ “Self-regulation has been rejected. That is to be welcomed. Any tenant will tell you this self-regulation simply does not exist.

“We will study what is proposed to see how workable it is. Everything in the proposed code already exists in the voluntary codes but up to now these provisions have been largely ignored by the pubcos.

“The key issues will be to stop the pubcos watering down the code - an independent adjudicator has to enforce the code as the necessary legislation goes through Parliament and then to make it work in practice.

“GMB regret that the free of tie option has been ruled out. That would provide a powerful incentive to the pubcos to deal fairly with tied tenants.

“The new regime has to stop abuses and lead to fair and affordable rents.”

Peter Bradley of Licensees Supporting Licensees (LSL):​ “We are delighted that the Government has taken long-awaited and much-needed action against pubcos and their unscrupulous business practices. For too long pubco tenants have taken the sharp end of the spile, struggling to make a decent living, whilst pubcos have systematically stripped pub landlords of their profits and stripped communities of their heritage. It should never have been the tenants’ responsibility to clear debts created by reckless, bullying, profiteering pubcos.

"Licensees have grafted hard, whilst the pubcos took all the reward, resulting in thousands of pubs closing, thousands losing their jobs and the lives of many pub owners left in ruin. Now, finally, we have a Business Secretary who has listened. Pubco tenants have finally been heard. Glasses will be raised by tenants and their loyal customers in celebration. "Time at the bar for dodgy pubcos!" It's time for a fair deal."

David Forde, managing director of Heineken:​ “The beer tie offers low cost entry to the pub business for many tenants who couldn't otherwise afford to buy their own pub and we are pleased the Government has recognised this.

“As a business we are constantly striving to strengthen our partnership with our tenants, therefore we support the introduction of an Adjudicator to ensure high standards across the whole industry.”

Andy Slee

Andy Slee, central operations director, Punch Taverns:​ “At Punch we hope that today’s announcement will bring an end to a long period of uncertainty for the sector and we now want to work with all parties to continue to build a long term sustainable future for British pubs.

“While self-regulation provided pub tenants with protections greater than commercial tenants elsewhere, we are remain committed to making the best of the Government’s proposals.”

Spokesperson, Enterprise Inns:​ “Enterprise Inns is committed to the success of our publicans, and despite the uncertainty created by this Government review we have continued to support our pubs, with investment in excess of £60m per year, throughout the consultation period.

“While it is disappointing that the Government is not persuaded by a self-regulatory regime that has proved itself to be both fair and effective, we welcome the clarity that the publication of the consultation response brings. We will be further examining today’s report to understand its full impact and implications for our pubs and our publicans.”

Andrew Buchanan, director of pub operations, Thwaites:​ “We welcome the Government’s confirmation that a statutory code to govern the relationship between pubco and tenant is to be introduced. There are many positives outlined within the proposals such as no mandatory free-of-tie option and no guest ale provision.

"We are already fully compliant with the current code and look forward to receiving more detail on how the independent body will be structured and oversee the implementation of the provisions of the code. At Thwaites we are comfortable that we operate in a fair and equitable manner and provide comprehensive levels of support to our tenants. It remains to be seen what impact the 500+ cap on the statutory code will have in the market place but we remain committed to a tied pub model within our tenanted pub business.”

Simon Emeny

Simon Emeny, chief executive, Fuller’s:​ “Whilst we are disappointed that the Government felt the need to introduce a statutory code, this does finally bring the matter to a conclusion. As a Family Brewer, we have always maintained an excellent relationship with our tenants – as reflected in our recent Publican Award – so whilst we would have preferred self-regulation we are pleased to see that the Government has recognised this by reducing the burden on smaller companies.

“The industry has been operating with a degree of uncertainty due to countless investigations into the tie and the pubco/lessee relationship. At least the code will provide a definitive framework for us moving forwards so we can just concentrate on what we do best – running great pubs.”

Chris Welham, managing director, Spirit Leased:​ "We are pleased that the Government has taken the time and care to consider this important industry issue.  It is apparent that they have listened thoroughly to all parties and produced a response which is in the interests of the pub sector as a whole.   

"The proposal for a Statutory Code has provided much needed clarity and addressed some fundamental differences of opinion. Critically, the Government has recognised the valuable importance of the tie and acknowledged that this is not seen to be detrimental to tenants.   

"As a Company, we don't believe the Statutory Code will be particularly onerous on us, given we already abide by the principles of self-regulation. We see strong benefits to the industry and look forward to seeing the final details of the Code."

Nick Griffin, of the Brighton & Hove Licensees Association:​ “We are pleased that at long last the industry has some certainty. We can all move forward in the knowledge that there will be a statutory code, nothing is more damaging to an industry than uncertainty.

“Our hope is that we can now work collectively to promote pubs free of the distraction of lobbying either for or against statutory intervention. At BHLA, we remain committed to the task of moving our industry forwards, this is a step in the right direction.”

Andy Clifford, Strategy and Property Director, Admiral Taverns:​ “Whilst we’re disappointed that the government has opted for legislation, we welcome the end of a prolonged period of uncertainty for licensees and pub groups.  We look forward to working with industry and government to support the creation of this new legislation – and to moving on from more than a decade of debate on the relationships between licensees and pub groups.

“We believe that, increasingly, tenanted companies like Admiral must win ‘the right’ to work with talented licensees by creating a culture of positive working relationships that genuinely deliver excellent service and tangible business support to the individuals who chose to run tenanted or leased pubs – this is what will drive industry standards beyond any legislation.  

“It is a huge focus for Admiral, as borne out by recent independent industry research conducted by HIM – examining pub licensee experiences – which found that nearly eight out of 10 Admiral licensees would recommend us to another publican.  We believe this strong result is due to the fact that we do indeed work hard to support our licensees, and to build genuine and positive working relationships.  As such, disputes between licensees and Admiral are very rare.

“We will of course continue to support the voluntary approach until this proposed legislation is enacted, and do all we can to ensure that the new statutory code does not negatively impact our licensees in any way.”

George Barnes, property and tenanted trade director, Shepherd Neame:​ “In recent years we have increased the investment in our tenanted pub estate and the range of support services we provide. We pride ourselves on both the quality of our pubs and the level of engagement we enjoy with our licensees.
 
“As such, we are disappointed these relationships will now be subject to statutory regulation. We will be looking closely at the current draft Code of Practice which may impose significant cost on smaller companies and is still subject to further consultation.
 
“Whilst overall we welcome greater certainty for the sector, we hope to be allowed to continue to develop our offer for the benefit of our licensees and our consumers."

Lloyd Stephens, tenanted trade director, Wadworth:​ ‘’Whilst our preference would have been for self-regulation rather than statutory, it is good that the government recognises the importance of the tie in the tenanted model for breweries such as ourselves which will allow continued investment in our property and protect existing and future employment in the licensed trade.’’

What do you think of the proposals? Have your say by e-mailling wnzrf.jnyyva@jeoz.pbz

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