Member Article

Pub reforms prompt mixed response

Government reforms aimed at boosting regional brewing have caused a wave of controversy within the industry.

The Department of Business, Innovation and Skills has revealed it will protect the tied-tenancy agreement, despite the findings of the Business Select Committee that was critical of the pub industry, and suggested self-regulation had failed.

Campaigners had called to tackle the issue of ‘tied’ pubs, where licensees are obligated to buy their beer from large pub companies.

Phil McCabe, senior policy adviser for the Forum of Private Business, said: “The pubco business model does not work and relies on squeezing small landlords until they have nothing left.

“This is clearly a case of indulging market failure at the expense of thousands of small businesses - significantly more tied pubs are closing compared to free-of-tie pubs, many of which are actually opening their doors.

“Given the industry’s disastrous history of self-policing, it is utter madness to again trust that pubcos will manage themselves properly.”

The sentiments were echoed by CAMRA chief executive, Mike Benner, who said: “The Government has been cavalier in rejecting the recommendations of the Business Select Committee and instead putting its faith in the ability of the very companies accused of malpractice to finally put their house in order.

“The lack of any formal public consultation on this package of measures is truly remarkable and suggests a failure of Government to listen to all interested parties including the consumer.

“We are pleased the Government has recognised the serious problems of unfair practice in the relationship between the large pub companies and lessees, but deeply disappointed that they are proposing only a weak package of reforms.”

Meanwhile, many breweries have welcomed the news, suggesting it will protect jobs of local people and suppliers, as well as consumer choice.

Paul Wells, chief executive of Bedford based brewer, Charles Wells Ltd, applauded the decision as a boost in confidence for family brewers and their tenants, and remarked that the brewery tie is vital for the regional industry.

He said: “As a family owned company, we take a long view of investment into our pub buildings and, within the traditional brewery tenancy agreement, we take the costs of looking after and improving the buildings we own.

“This is a centuries old business model and allows a strong partnership between licensee and brewer, sharing the ups and downs of trading the pub.”

This was posted in Bdaily's Members' News section by Tom Keighley .