Speaking at last week’s Tenanted Pub Company Summit the minister also admitted the complications of establishing the added value of a tied arrangement would be a challenge as the bill progresses.
Lewis said he was “convinced the statutory code is the right outcome” because the Government could not ignore the “valid concerns” of tenants.
He said: “We have to also make sure that action is proportionate and not an over–reaction. Because unfair treatment by pub companies of their tenants is the exception rather than the rule. And for that reason I do not believe pub companies will find the legislation onerous because the principles of self-regulation are already largely adhered to by pub companies.”
The Government’s proposals for a statutory code will be included within the Small Business, Enterprise and Employment bill, which Lewis said he expected to be introduced by the end of the month.
But he said the Parliamentary process was unlikely to be completely smooth.
“With a piece of legislation like this we would be kidding ourselves if we didn’t expect some amendments to come forward”, he said. “But, we have been very clear in outlining our position on the tie.”
Jonathan Neame, chief executive of Shepherd Neame, asked the minister why, after early indications that any code would only apply to companies with 500 or more pubs, the Government had introduced a core code covering all tied tenants.
Lewis said: “There is no good argument as to why a tenant who is dealing with a company that owns five pubs should not expect the same level of fairness as a tenant of a company with 5,000 pubs.”
On how the value added by the tie would be evaluated by any adjudicator, Lewis said: “It’s one of the reasons the industry was able to convince the Government that the mandatory free-of-tie option was just not viable, because there is also this value added issue and that’s one of the things the legislation will have to deal with. If the adjudicator is called in to look at things they will have to take into account what the actual value is.”