Statutory code: Fair Pint slams 'ludicrous' BBPA stance on free-of-tie option

By James Wallin

- Last updated on GMT

Related tags: Market rent, Beer, British beer & pub association

Simon Clarke said the BBPA needs to change its 'scratched record'
Simon Clarke said the BBPA needs to change its 'scratched record'
Fair Pint campaigner Simon Clarke has accused the British Beer & Pub Association of encouraging the "terminal decline" of the industry with its response to the statutory code proposals.

Clarke was responding to a statement by BBPA chief executive Brigid Simmonds yesterday in which she said calls for a mandatory free-of-tie option must "remain unheeded".

He said: "The BBPA still don't get it - the cat is out of the bag. Everyone knows beer is cheaper in the open, competitive, market place. They are making themselves look even more ludicrous trying to play the old scratched records. The BBPA members should just admit it, they know the tie will not survive if it has to truly compete unless they lower rents to compensate tied tenants for excessive tied product prices.

"Evidence is freely available that beer is cheaper in the open, 'free' market in many cases tied tenants are paying almost twice the open market price for beer from their pub owning company.

"The response to the consultation was disappointing in the sense that it does not contain the provisions to deliver the material and meaningful changes promised by the Government, however, it will be a positive step to get something in the statute books to work on. The pubcos know this is a spring board for the real changes that are needed and will be keen to try and use all their minions to swallow and support the 'soft touch' proposed which allows the gravy train to keep on chugging down the track.

Self-policing

"No one asked for abolition of the beer tie just the choice of being tied or not enabling the tied model to stand on its own two feet and survive on its own merits instead of ripping off tenants and customers. The groups genuinely representing tenants have always maintained that a Market Rent Only (MRO) option is the only tabled solution that stands a chance of delivering fairness and circumstances where a tied tenant is no worse off than if they were free of tie. A market rent only option is practically self policing, elevating the adjudicators time for other issues, it means that tenants have the power to choose to abandon the tied model where it is undermining their chances of business success and therefore forces pub companies to make sure that the tied model they operate remains fair and reasonable.

"The legislation proposed, if not firmed up, simply ensures the health of the industry continues as it is - terminal decline. That suits the pubco executives who have a game plan to liquidate their assets and grab as much as they can as quickly as possible. If the proposal is left as it is there will certainly be more pub closures and job losses the pubcos will be using the intervention as the excuse where in fact it is the weakness of the soft touch that has exposed the pub sector to more misery.

"The opponents of legislation implementing a market rent only option understand that to maintain their buying power and continue to operate the model it would have to be fair. If the tied model is not operated fairly then tenants will choose to have a normal commercial rent only lease. It follows that with the market rent only option it is the tied model itself that dictates its destiny. If it is run fairly it will flourish if not then it will be the model not the pubs that will slowly die out.

Greedy

"Any investor will expect a reasonable return that includes tenants of pubs. The speculative capital investment of a pub company in a property does not take priority over the capital, time and effort of a tenant. Pubs, their tenants and customers are not there to subsidise poor business decisions based on rapacious expansion plans and greed.

"The use of the old saying the 'grass is always greener' is laughable to most tied tenants - sat on the sand like desert side of the tied fence. Where fairness exists business is booming, look at the craft beer explosion.

"Thousands of tied pubs operating under fair terms would not need support as their businesses would be allowed to profit. As for beer prices over the bar Wetherspoons demonstrate just how cheap beer could be if pub operators could purchase at the right price instead of the inflated tied price.

"Small individual tenants should be given the choice of being tied and 'supported' or simply paying a commercial rent and supporting themselves on their profitability."

Related topics: Legislation

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