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EATING & DRINKING

UK pubs to get statutory code

By thirsty hack Ignatius Rake

Posted June 03, 2014
booze news

UK government announces plans "to protect thousands of publicans from unfair treatment and hardship".


Following an eight-week consultation process on pub companies (pubcos) and tenants that ended just under a year ago, Deputy Prime Minister Nick Clegg MP and Business Secretary Vince Cable MP have now announced that the government will give publicans new rights under a statutory code and set up an independent adjudicator with the power to resolve disputes.

The adjudicator, the government says in a press release, "will have powers to enforce the new code, arbitrate disputes, carry out investigations into alleged breaches and impose sanctions on pub-owning companies if they fail to comply".


CENTRE OF OUR COMMUNITY
"British pubs are often the centre of our community, a place where we meet friends, watch sport and enjoy a Sunday roast – they are a national treasure and the envy of the world," Clegg says.

"They also contribute billions to our economy every year."

"But for too long, landlords who are tied to larger pub companies have struggled to make ends meet – over half earning less than the minimum wage1."

"The self-regulatory approach hasn't worked, so these new rules will give fairer treatment for landlords so that they can keep your local pub going strong."

"Local pubs and their owners," Cable adds, "play a vital part in vibrant local communities right across the country, as well as making an important contribution to the economy."

"Far too many landlords feel their income is squeezed by big pub companies."

"So today we are taking action to make sure they get a fairer deal."

"The introduction of a statutory code will make sure that tied tenants get an accurate assessment of how better off they could be and the new independent adjudicator would make sure pubs companies are forced to act to redress the situation if they aren't behaving responsibly."


FAIRER RENT ASSESSMENTS
At present, tied tenants have to buy beer from their relevant pubco and as such, the government notes, "usually pay a higher price for it".

This, the government continues, "should be balanced out by the subsidised rent or other benefits they may receive from their pub company, but this may not happen and rents can be too high".

Under the new code, pub landlords "will benefit from fairer rent assessments".

Furthermore, all tied tenants will be given the power to request a rent review if they have not had one for five years.

For the first time to date, tied tenants will also have the right to review the information pubcos use to decide to increase rents.

This greater transparency will thus "allow tenants to see what information their landlord has used in calculating the rent and decide whether an increase is fair".

There will also be additional protection for tied tenants whose pubco owns 500 or more tied pubs.

If they cannot agree a tied rent with their pubco, these tenants will have the right to request a 'parallel free-of-tie rent assessment' (costing £200 ($335)) to show whether they are worse off than their free-of-tie counterparts.

Additionally, tied tenants will now have the right to choose whether to be tied for gaming machines and will also be able to report breaches of the code to the new independent adjudicator, who will also arbitrate on rent disputes.

"The adjudicator will have the power to provide redress where the code has been breached," the government states.

"The adjudicator will also be able to launch investigations into allegations of systemic breaches of the code and to impose sanctions – including financial penalties – if it finds the code has been breached."


CAMRA'S RESPONSE
The new measures have been welcomed by the Campaign for Real Ale (CAMRA), which last month delivered a petition to Cable calling for urgent pubco reform.

"We are delighted that after our 10-year campaign the government is now introducing a pubs adjudicator to protect the nation's pubs," CAMRA's head of communications Tom Stainer says in a press release.

"With 28 pubs closing a week it is vital that publicans, who are on the frontline of keeping our valued community pubs open, are given protection from heavy-handed business practices from the big pubcos."

"Publicans could see the price they pay for beer fall by up to 60p a pint2 if the adjudicator forces the big pubcos to match open market prices."

"A 60p-a-pint saving would be a huge boost in the battle to keep pubs open and could lead to cheaper pub prices for customers."

"While we urge the government to go further by introducing guest beer and market-rent-only options for tied publicans, today's announcement is great news for publicans and pub goers alike."

"Over the last decade many thousands of pubs have been lost as big pub companies have squeezed them out of existence with sky-high rents and beer prices."


THE GMB'S POSITION
The GMB, the union which represents tied pub tenants among others, has also welcomed the measures, albeit with certain reservations.

"Self-regulation has been rejected," says Steve Kemp, GMB lead officer for tied pub tenants, in another press release.

"That is to be welcomed."

"Any tenant will tell you this self-regulation simply does not exist."

"We will study what is proposed to see how workable it is."

"Everything in the proposed code already exists in the voluntary codes but up to now these provisions have been largely ignored by the pubcos."

"So the key issues will be to stop the pubcos watering down the code and pulling the teeth an independent adjudicator has to enforce the code as the necessary legislation goes through parliament and then to make it work in practice."

"GMB regret that the free-of-tie option has been ruled out."

"That would provide a powerful incentive to the pubcos to deal fairly with tied tenants."

"The new regime has to stop abuses and lead to fair and affordable rents."

"The system now is that interest payments on the huge pubco debts have to be paid each week before the tenant pours a pint and regardless of whether s/he can make ends meet or not."

"To pay these sky high rents a pint of lager is on average 80p per pint higher and ale is 65p per pint higher than justified by inflation and like-for-like changes in taxes since 1987."

"This is pricing pubs out of the market and they have closed in droves."

"The test of the new regime will be if it can stop this."

To download the government's response to the consultation and also its impact assessment on a pubs statutory code and adjudicator as PDFs, have a click of this.


See also Defuse the pubco "time bomb"!, posted 15/5/14.


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.


Footnotes

1) A CAMRA survey of publicans found that 57% of those in tied tenancies earned less than a National Minimum Wage equivalent salary of £10,000 a year.

2) The 60p-a-pint figure is based on CAMRA's comparison of pubco tied price lists and free-of-tie price lists.



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