PCA launches beer duty and waste consultations
The decision to launch the consultation followed a review by the PCA Paul Newby and deputy PCA Fiona Dickie about how pub companies regulated by the pubs code reveal the quantity of alcohol on which duty has been paid and how they calculate the saleable volume of draught products supplied under tied agreements.
These calculations can impact achievable turnover and expected profit margins, meaning they are important to tenants when considering the fairness of their tied rent.
The consultation will run until 11 January 2019. It outlines proposed guidance in relation to pub companies’ statutory obligations to accurately account, when proposing a new tied rent, for the duty paid on alcohol that will be supplied under the tenancy.
Allowing for waste
It also lays out the obligation for pub companies to account for the volume of draught beer and cider that will be saleable after allowing for waste.
The PCA will particularly be expecting pub companies to account for sediment and operational waste separately.
Newby said: “This issue of compliance has been discussed at length with the pub companies and the PCA’s approach will not come as a surprise.
“Dickie and I have decided to launch a consultation because these cover complex and technical areas of the pubs code and we want to ensure all industry stakeholders have the opportunity to comment on what we are proposing.”
Clear explanation
The consultation lays out how pubcos need to be consistent and transparent when it comes to showing how they work out wastage, according to deputy PCA Dickie.
She added: “Historically, all pub companies have dealt with waste in different ways. The pubs code requires them to give tied tenants a clear explanation of how waste is calculated and this consultation sets out our proposals for delivering fairness for tenants by ensuring greater consistency and transparency in the way these calculations are set out.”
Business development managers employed by the regulated pub companies should also be trained to understand and explain to tenants how waste has been calculated.
The PCA is working towards publishing statutory guidance for the industry during spring 2019.
UKHospitality chief executive Kate Nicholls said: "We will be engaging with the consultation to ensure the Pubs’ Code process is as transparent and workable as possible. We will continue to work with the PCA and all stakeholders in the development of this new statutory guidance.”
