The amendment was tabled by Sheryll Murray MP at a committee meeting on Tuesday and was successful after 11 out of 18 members of the Small Business, Enterprise and Employment Bill Committee voted in favour of the fundamental change today, the PMA understands.
It means that, as the pub company estates currently stand, Enterprise Inns, Punch Taverns, Marston’s, Star Pubs & Bars, Greene King and Admiral Taverns are the only ones that will have to abide by the code.
The Government had proposed a core code to protect all tied tenants and an enhanced code to protect those under pub companies with 500 or more tied pubs.
However, British Beer & Pub Association (BBPA) public affairs director David Wilson told the PMA he thought the Government would seek to reinsert smaller pub companies into the code either at the report stage in the House of Commons or in the House of Lords.
“I can’t imagine the Government will let it rest,” he said.
Griffiths told the PMA earlier in the week that the amendment could only be successful if it received support from Labour.
Griffiths also tabled an amendment to exempt all tenancies at will, but this was not put to a vote after Business, Innovation & Skills department minister Jo Swinson promised to look again at this matter.
Toby Perkins MP tabled an amendment to regulate all pub owning companies with 500 pubs of any type, which would have included companies such as JD Wetherspoon and Mitchells & Butlers, but this was defeated.
Griffiths said he was surprised that Labour did not table an amendment to exempt free-of-tie pubs.
“Everyone was expecting Labour to make that amendment given their previous stance so that is really surprising. I don’t know why they changed their mind,” he said.
He added that a “probing amendment” was tabled regarding removing the clause that includes the principle that tied tenants should not be worse off as a result of any product or service tie.
However, he said this was only used as a method to try and “get more clarity and information from the Government” on the principle, and was not put to a vote.
BBPA chief executive Brigid Simmonds said: “We have always been clear that we are in favour of exempting small companies provided that it does not distort competition.
"I hope that the Government listens to MPs on the bill committee and accepts this principle, but pays particular attention to the evidence from RICS, regarding parallel rent assessments; with a threshold, we must have a level playing field for companies, regardless of their size.”
The Independent Family Brewers of Britain (IFBB) welcomed the decision and said it would continue to remain fully compliant with the voluntary code.
IFBB chairman James Staughton said: “We were vocal about our opposition to the planned inclusion of pub companies with fewer than 500 tied pubs in the code as the diseconomies of scale would have meant the cost of compliance would have been far greater per pub than for the larger companies, without any apparent benefit to anyone, therefore we are pleased that this amendment has been passed.
We hope that the amendment which supports smaller businesses will also get the support of the whole House at the next Report stage. We’d like to take this opportunity to thank MPs on the Bill Committee for their cross-party support.”
Kate Nicholls, chief executive of Association of Licensed Multiple Retailers, said: "We have always argued that any statutory intervention should be proportionate, pragmatic and measured, reminding the Committee that size was only an indicator of market risk. While our preference was for the existing industry code to be put on a statutory footing in respect of small pub companies and family brewers in order to draw a line under this issue once and for all, we understand the reasoning behind the amendment.
"The traditional tied tenancy model is extremely beneficial - it provides low cost entry and has worked to secure the future of many of our community assets. It is right that it is subject to a light touch regime and we look forward to working with the family brewers and smaller pub companies on future self regulation."