Pub Companies - Business and Enterprise Committee Contents

Memorandum submitted by Herefordshire & Worcestershire CAMRA


  I would like to bring to your attention the use of restrictive covenants to prevent purchasers reopening a closed pub that has been sold to them by one of the pub companies.

  The Morgan Inn in Malvern is due to be sold at auction. I have attached the sales particulars (not printed here) from the selling agents, Breach Wood Ingram. I would like to draw attention to the following condition of sale: "The premises are being sold with a restrictive covenant preventing the property from being used as a public house, restaurant or hotel or for any use involving the sale or supply of intoxicating liquor."

  The use of restrictive covenants such as the above result in:

    —  the unnecessary loss of community amenity and employment opportunities;

    —  local plan policies aimed at protecting pubs being bypassed; and

    —  the frustration of individuals and small and medium sized brewers who wish to purchase a free of tie operation.

  In many cases pubs that are not viable under the leasehold model can become viable when operated as free of tie or freehold operations. The use of restrictive covenants contributes to a shortage in the number of freehold or free of tie pubs on the market, a shortage which may mean that aspiring pub operators feel compelled to opt for a leased pub. CAMRA would urge the Committee to recommend that the use of restrictive covenants by pub companies is prohibited.

4 December 2008

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