The government has revealed plans for an independent adjudicator in the pub industry to help struggling landlords. The Department for Business said the aim was to reduce unfair practices, such as high rents and the prices publicans have to pay for beer.
Campaigners have complained for years of being exploited by so called pubcos. Pubcos are the large businesses that own thousands of properties and decide where tied landlords can buy beer from and at what price. Approximately half of all pubs in the UK are owned by pubcos.
Business Secretary Vince Cable
Business Secretary Vince Cable said he also wanted to create a new legal code to look at the relationship between pubcos and publicans, which would be imposed by the adjudicator.
The British Beer and Pub Association (BBPA) said it was frustrated that self-regulation had not been given a proper chance.
“Whilst the Association believes that statutory underpinning of recent industry reforms will result in unnecessary red tape and bureaucracy, it does however, welcome the endorsement of the tied house model and the clear distinction drawn between leases and traditional brewery tenancies,” it said.
Jonathan Neame, BBPA chairman added: “In the consultation, we will be urging the government to ensure that any statutory process is light-touch and cost-effective, to protect consumers from bearing the brunt of unreasonable additional costs.”
The Fair Pint campaign, which aims to support publicans get a fair deal, welcomed the announcement.
Publican and Fair Pint campaigner Simon Clark said: “For far too long, tied pub tenants have been abused by big pub owning companies. Many have lost their livelihoods, savings and have lived in fear of losing their home.
“There is work to be done on the detail and we believe that a free of tie option would be the best way of guaranteeing fairness in tied deals, but this represents genuine progress which will give a boost to publicans and consumers by increasing the viability of local pubs.”
The Campaign for Real Ale (Camra) has been calling for immediate action to help landlords against the financial pressures they face.
In a report in November, Camra said that 18 pubs a week were closing in the UK, up from 12 a week in 2011.
The government’s plans come before a scheduled House of Commons debate on a legal code of practice for pub companies. The debate was forced by Labour, who has long been pushing for action to save pubs from closing down.
The proposed adjudicator will have the control to carry out investigations and enforce financial penalties.
“There is some real hardship in the pubs sector, with many pubs going to the wall as publicans struggle to survive on tiny margins,” Mr Cable said.
“Some of this is due to pubcos exploiting and squeezing their publicans by unfair practices and a focus on short-term profits.
“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.”
He added that he had given the pubcos one last opportunity to change their practice last year; however it was clear that the self-regulatory tactic was not enough.
An official consultation on the proposed measures will begin in the spring.
