NEW CODE OF
PRACTICE IS INEFFECTIVE
19.5.11 PUNCHLINE GLOUCESTER.
Almost seven in 10 tenanted pubs think a new Code of Practice brought in to
give them a fairer deal will not improve their relationships with the Pub
Companies that own them.
Tenanted pubs have long paid inflated beer prices and have high rents
imposed on them by Pubcos. Since 2004, Parliamentary Committees have
regularly expressed concerns over these industry practices.
Last year the Business, Innovation and Skills Select Committee advised that
a revised Code of Practice should be put in place to help give tenants a
fairer deal, as they were being crippled by high rents and beer prices.
But a new FSB survey shows that 69 per cent of tenant landlords do not
believe the new Code of Practice will help them get a fair deal.
In reality, it places additional responsibilities and financial burdens on
the tenant. Of those that have signed their Pubco\'s Code of Practice, half
thought it was intended to be a legally binding contract for both sides.
Yet the Code of Practice is only meant to act as an agreement between both
parties to help improve their relationship and offers pubs no security from
bad deals. The FSB wants to see small firms offered protection by making it
Flow monitoring equipment - which measures pints pulled - frequently gives
incorrect readings. The FSB is concerned that Pubcos are threatening to
penalise tenants for buying beer outside of their tie when they are not, by
writing the use of flow monitoring equipment into the Code of Practice.
The Government has promised to take legislative action if the relationship
between Pubcos and their tenants has not improved by June this year. While
this will go some way to easing the pressure put on tenants by their Pubco,
the FSB is calling on the Government to:
Ensure the Code of Practice, written by an independent body, is put into
law, which: provides tied tenants with the option to become free of the
tie; an open market rent review; and an option for selling a guest beer
Ensure the Code of Practice is written and overseen by an independent body
that sits within the new competition body in the interim period before it
is written into law
Keith Reynolds, Chairman of the Gloucester Licensed Victuallers
Association, said: "The tie situation definitely needs to be reviewed at
"By and large tenants do not get a good deal. Some pub companies are
prepared to negotiate over rent but not with beer prices and this has been
the case for some time.
"Pubs are closing although there are new places opening up. But these tend
to be of the café/bar nature rather than the traditional pub as we know
"Pubs that have closed recently in and around the city include the Welsh
Harp in London Road, the Robin Hood on Bristol Road, the Musket in Matson
and Crackers Nightclub in Brunswick Road."
A prominent city centre landlord who asked not to be named, said: "This is
all true. But it's not just tenant landlords. The situation is just as bad
if not worse for those leaseholders who are tied to a particular beer
"The supplier will buy a barrel of beer from the brewery at say £67-70 and
sell it on to us for £120 which is a nice business if you can get it.
"I think the pub companies need to decide whether they are property
companies or beer trade companies - not both.
"But if the government really wants to help the pub trade they should also
consider stopping the supermarkets selling discounted beer."
Mark Owen, chairman of the city branch of the FSB said: "For years now,
tenant landlords have been telling us they are being crippled by both high
beer prices and rents which have to be passed on to their customers to
"Things looked set to improve when the revised Code of Practice was put in
place. But our members have told us that it isn\'t working.
"There are still 25 pubs closing every week across the country. The
closure of a pub does not just affect tenants and their families, but the
wider community. The local pub is one of the cornerstones of our society
and every time one closes it diminishes our heritage.
"Tenanted pubs are still not getting a fair deal from the Pubcos that own
them - seven in 10 do not think the Code of Practice will improve anything.
"The Government must fully enforce a code on the industry and ensure it is
overseen by an independent body. Until then we could see the pubs at the
heart of our communities disappear forever."