Business Secretary Vince Cable has reiterated his determination to introduce a code of practice to protect tenants of large pub companies (pubcos) from ‘a combination of unfair practices.’ If the code is introduced it could save tenants thousands of pounds a year in rent and the price they have to pay for beer.
In a press release Mr Cable says that it has become clear that the self-regulatory measures introduced by the government in 2011 have failed and that further action is required.
Consequently he is to consult on mandatory rules which would govern the relationship between pubcos and their tenants which will be enforced by an independent adjudicator.
Mr Cable said; “We gave pub companies every chance to get their house in order. But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn’t working.
“Pubs play a valuable role at the heart of our communities and we urgently need a change to help them survive and become profitable.
“These plans will do just that and could save pub tenants £100 million per year by making sure that pub companies charge their tenants fair rents and beer prices.”
According to the latest available figures there are around 50,000 pubs in the UK and roughly 50 per cent of these belong to pubcos. The proposals will apply to companies which own over 500 properties and will affect well-known names including Marston’s, Punch Taverns and Enterprise Inns.
Besides governing rents and beer prices, the new code of practice would allow tenants to stock independently picked guest beers from other suppliers which would also benefit the many micro- breweries producing local ales.
When the proposals were initially floated in January they were welcomed by GMB, the union representing tied pub tenants, which claims that pubcos have “pulled the wool” for years.
However the British Beer and Pub Association (BBPA) claimed self-regulation had not been given a fair chance and that a statutory code would result in “unnecessary red tape and bureaucracy.”