Member Article

Pub landlords supported by statutory code proposals

Pub landlords will receive help from the Government following a consultation in the Spring, which was announced today by Business Secretary, Vince Cable.

If plans are approved the Government will introduce a new statutory code and an adjudicator to act between pub companies, or “pubcos”,and their tenants, “publicans”.

Unfair practices within the industry will be addressed by Dr Cable’s code and adjudicator, which will investigate disagreements between pubs and their owners.

The news, announced on Tuesday, comes before a Labour Party debate in the House of Commons over the relationship between pubcos and publicans.

Dr. Cable’s code will prevent abuses of the “beer tie”, which forces publicans to only sell certain types of beer determined by their pubco.

The business secretary commented: “There is some real hardship in the pubs sector, with many pubs going to the wall as publicans struggling to survive on tiny margins.

“Some of this is due to pubcos exploiting and squeezing their publicans by unfair practices and a focus on short-term profits. Four Select Committee reviews since 2004 have highlighted these problems.

“Last year we gave the pubcos one last chance to change their behaviour but it is clear that the self-regulatory approach was not enough and in October I wrote to the industry to seek their views. A change in the law is now needed to shift behaviour.”

The statutory code will add to the current Industry Framework Code, but will strengthen the “fair dealing” provision in the pubco-tenant relationship, and will address weaknesses in the “beer tie” agreement.

All pubcos owning more than 500 tied leases are expected to be subject to the Government changes, after suggestions that smaller companies do not abuse the system as much as larger firms.

Dr. Cable concluded: “I hope these measures mean publicans are given a fairer chance at running their pub, which in turn will help them grow their businesses instead of losing them.”

This was posted in Bdaily's Members' News section by Miranda Dobson .