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BBPA slams free-of-tie

By thirsty hack Ignatius Rake

Posted June 04, 2014
booze news

BBPA identifies statutory code for UK pubs as potentially costly threat to jobs; dismisses calls for free-of-tie option.

While the introduction of a statutory code for the UK's pubs has been welcomed by both the Campaign for Real Ale (CAMRA) and the GMB trade union, the response from the British Beer & Pub Association (BBPA) has been somewhat less enthusiastic.

Following the government's announcement yesterday (3/6/14) that it will seek to implement the code and appoint an independent adjudicator to oversee it, the BBPA issued a press release in which chief executive Brigid Simmonds states that while it welcomes "greater certainty and clarity after such a long period of debate", the Association is nevertheless "disappointed that the government is seeking to introduce potentially costly legislation, with the disproportionate costs of a statutory adjudicator, rather than supporting the existing, and evolving, system of self-regulation".

This would appear to put the BBPA at odds with Deputy Prime Minister Nick Clegg MP, who yesterday asserted that "the self-regulatory approach hasn't worked" and that these new rules will thus "give fairer treatment for landlords".

"Partnerships with entrepreneurial tenants and lessees give them the opportunity to run a pub with very little capital investment and BBPA members are committed to supporting lessees and tenants," Simmonds says.

"Proposals that dilute the support pub companies can give to these entrepreneurs are unwelcome."

"Capital investment (some £200m [$335.1m] per year) and transfer of value through reduced rents and a range of operational support is hugely important to a pub company's ability to sustain jobs and successful community pubs."

"The government's own Impact Assessment shows that these proposals will close at least 52 pubs with the associated hundreds of job losses."

Contrary to claims made yesterday by both CAMRA and the GMB, Simmonds believes the new code will actually lead to even pricier pints.

"A self-regulatory system costing around £100,000 per year will be replaced with a statutory adjudicator costing nearly £2m per annum and, as highlighted in the Impact Assessment, these additional costs will be passed on to consumers in the form of higher beer prices," she says.

greg mulholland
Mandatory option: Greg Mulholland in 2009. (Check bottom for credit)

Moreover, with confirmation during today's (4/6/14) state opening of parliament that the code will be introduced during this new legislative session, the BBPA has now issued a subsequent press release in which Simmonds strongly disagrees with calls for a free-of-tie option to be included in the code, something advocated, for example, by Greg Mulholland MP, coordinator of the Fair Deal for Your Local campaign and chair of the parliamentary Save the Pub group.

Indeed, Mulholland states on his website that "it is vital" that the government "makes the free-of-tie option mandatory".

"It is important for the health of the pub industry that this legislation is implemented as currently proposed and calls for free-of-tie options remain unheeded," Simmonds says.

"Proponents of legislating for landlords to be forced to offer a mandatory free-of-tie option fail to see that reducing the commercial buying power of the pub company would destroy the model and threaten the closure of vast numbers of pubs throughout the country with thousands of vital jobs lost – as acknowledged by the government's own economic analysis."

"Why would the pub company invest capital in a business if they did not know that at the end of five years they would still be making a reasonable return from their drinks tie?"

"Regional breweries, often major local employers, would be under serious threat of closure without the guaranteed route to market via their tied pubs."

"The grass is always greener – this could not be more true for proponents of free-of-tie who maintain that their beer would automatically be cheaper and the beer choice wider."

"This is not necessarily true and if it was, it is highly likely that they will be tied to a different distributor or wholesaler, who in return for cheaper beer will insist on loyalty to their brand or range of drinks."

"You only have to look at Europe, where there are only two or three brands on the bar," she continues.

"In reality, the support for the tied pub by the pub company is far greater than anything offered by a commercial landlord."

"They have a shared interest with the lessee as co-investors in making the pub succeed."

"Pub companies have sought to protect tenants and lessees from the hardest impact of the recession."

"Year on year and for the past four years, beer has been cheaper in tenanted and leased estates than in independent estates and in tied pubs a much greater proportion of local cask ale is sold; some 81% compared with 60% in independent pubs."

"The distribution of beer from smaller breweries is achieved through the buying power of the larger pub companies and a competitive market."

"New routes to market for smaller producers have opened up through their engagement with pub companies, who have recognised that consumers are demanding a broader range of drinks in their pubs."

"Light touch legislation is one thing but at the end of the day pub companies need to be able to support small individual tenants who, with very little capital, are able to run their own business."

"Anything which dilutes this support would be very unwelcome and destabilising for the pub sector."

The BBPA describes itself as "the leading body representing Britain's brewers and pub companies".

Originally founded as the Brewers' Society in 1904, the Association's members "account for some 96% of beer brewed in Britain today and own more than half of the nation's pubs".

"These members," it continues, "are also diverse in their activity – from international brewers, to market-leading managed pub companies, the nation's largest tenanted pub companies and historic family brewers".

This diversity of membership, the BBPA says, enables it "to speak up for the industry, championing its cause, whilst also being able to credibly claim a wide representative base".

As well as being a "a vital cultural icon unique to Britain", the country's beer and pubs sector, it continues, is also a "significant contributor to the economy", with "almost a million jobs" reliant upon it and the economy "£21.4bn better off".

See also UK pubs to get statutory code, posted 3/6/14.

Ignatius Rake
is a freelance journalist, geographer and world traveller who has visited more than 70 countries on six continents. In 2013, he represented the UK at the Fourth Annual Smoke's Poutinerie World Poutine Eating Championship in Toronto, coming an abysmal last and getting his arse royally whipped by Rake & Herald reader and Major League Eating speedscarfing supremo Joey 'Jaws' Chestnut. He has been known to like a pint.

Picture credit

Bottom: Greg Mulholland in in 2009 by

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