2 BBPA Framework Code of Practice
Introduction
21. One of the principal recommendations in the
2004 Report was that BBPA's Framework Code of Practice "should
be revised as a matter of urgency".[22]
In evidence to our 2009 inquiry the BBPA told us that it believed
that its revised code had fulfilled "most of the requirements
of the 2004 Report."[23]
The BBPA further asserted that all member companies were subsequently
invited to review their codes and revise them as appropriate in
line with the BBPA's new Framework Code.[24]
22. Our 2009 Report tested these assertions and
found that, contrary to the view of the BBPA, the recommendations
of the Trade and Industry Committee had not been met and that
further work was necessary to solve the problems of the "inequality
in bargaining power and inadequate means to resolve disputes".[25]
23. The BBPA's submission to this inquiry stated
that:
The BBPA (in conjunction with the BII and FLVA) is
developing a new industry Code of Practice that will bring real
tangible benefits to both those entering into new agreements and
existing licensees. The revised Code will [
] include improved
transparency, better and more complete information, better protection
for prospective tied pub operators and a more open rent review
process with inexpensive and accessible redress in case of dispute.[26]
A key aspect of this inquiry was to test whether
this new code would deliver these 'real tangible benefits' to
new and existing lessees. Simon Clarke, representing the IPC,
argued that this statement was nothing new:
It is almost as if there was never any code before
and this will now be the code. [
] there was a code before
the [Trade and Industry Committee Report] in 2004 and a code before
the [Business and Enterprise Committee Inquiry] in 2008 and one
after the [Business and Enterprise Committee Report] in 2009.
This one really cannot be any different in that it is not mandatory,
not regulated and independent.[27]
24. Mr Alistair Darby, representing the BBPA,
tried to reassure us that the industry was now committed to real
change. He explained that the working party set up by the BBPA
to rewrite the framework code was made up of people "who
recognise that some very serious concerns are raised by the [2009]
Report and they have to do a substantially better job this time
than it did post the [2004] Report."[28]
He was at pains to point out that the BBPA was "determined
to ensure that the new code is established and properly conducted
in the trade, not least because fundamentally that is good for
business."[29]
25. Brigid Simmonds, representing the BBPA, explained
that once the new BBPA Framework Code of Practice had been approved,
the BBPA would then go through the process of:
"bringing all the individual company codes into
alignment with the overarching industry code. All of those codes
will have to be implemented".[30]
The new Framework Code states that "all pub
companies operating tenanted or leased pubs should produce a Code
of Practice based on the principles set out in this Code",
and that "this is a requirement for membership of the British
Beer & Pub Association (BBPA)".[31]
26. We do not believe previous
BBPA and pub company Codes of Practice have been sufficiently
robust. Nor do we believe the pub companies have properly complied
with them. This history of evasiveness and the demonstrable consequences
for lessees inevitably requires a critical response to the new
Framework Code.
Does the Framework go far enough?
27. Lessee groups have expressed disappointment
with the new Framework Code. The IPC believed that the Framework
"does not address the specific needs and concerns of lessees"
and that it represented a "codification and formalisation
of existing good practice".[32]
It also said that the code "does not deliver anything particularly
new or substantive. Crucially, it leaves the fundamental nature
of the commercial relationship between landlord and lesseewhich
is at the heart of the Committee's deliberationsuntouched."[33]
28. The IPC argued that any revised Framework
Code had to be "independent of the companies being regulated;
capable of being rigorously enforced and upheld; and carrying
significant and effective sanctions for any breach of its provisions".[34]
It concluded that the published Framework Code of Practice:
fails those tests and we continue to believe that
the only effective remedy will be a mandatory Code of Practice
with access to independent redress. The estate agency and now
the grocery market provide effective models for this type of government
intervention.[35]
29. The Fair Pint Campaign stated that the BBPA
code was:
a wholly inadequate response to the criticisms of
the sector made by the Select Committee given that it totally
ignores the key areas of the Committees' concern. The fact that
the BBPA has chosen to respond to the Select Committee with a
set of proposals which would more or less leave the status quo
untouched shows that the BBPA's biggest pubco members are totally
unwilling to consider any meaningful change in the structure of
the industry. Their primary concern appears to remain their ability
to extract short-term income from their pub estates in order to
meet their debt obligations.[36]
30. Mr Simon Clarke, a representative from the
IPC, told us that
In total there were 25 [Business and Enterprise Committee]
recommendations. If we consider the entire industry response to
the report, 18 recommendations remain untouched in any shape or
form. In reality the pubcos and BBPA have fully addressed none
of the issues raised in the Report. Instead, once again, the pubcos
have merely given the impression that the industry is capable
of self regulation by 'promising' to partially address the less
substantial recommendations.[37]
He referred to it as "lipstick on a monster"[38]
and that the bad guys "stay rich and the good guys stay scared".[39]
31. The ALMR noted that it had taken the BBPA
eight months to produce the Framework Code and that this was "in
stark contrast" to the work undertaken by RICS to revise
its guidance over the same period.[40]
The IPC and Fair Pint also questioned the reason for the delay
claiming that the Framework Code:
differs little from the Heads of Terms reached by
BBPA, BII and FLVA in September 2009. We are at a loss to understand
why it has therefore taken so long to publish and, more importantly
why it was not available ahead of the Committee's evidence session
in December. This appears to be simply a delaying tactic rather
than an attempt to address the Committee's genuine concerns.[41]
32. We are disappointed that
it took until the end of January 2010 to publish the new BBPA
Framework Code of Practice. We were given sight of a draft Code
ahead of the evidence session in December 2009 and the difference
between the draft and the published Codes appears to be minimal.
This delay put back publication of our Report as it was only fair
to let other groups respond to it.
The Framework Code of Practice
33. In this section we offer an initial assessment
of the new Framework Code of Practice and the changes it has made
to the assignment of leases, the provision of training and professional
advice for new and existing lessees, the impact on local and regional
brewers, upward only rent reviews (UORRs) and Amusement with Prizes
(AWP) machines. An analysis of the differences between the existing
Framework Code and the new Framework Code can be found in the
Annex to this Report. We also consider the issue of flow-monitoring
equipment. In the next section of the Report we consider the enforceability
of the Code.
ASSIGNMENT OF LEASES
34. In 2004 the then Trade and Industry Committee
made the following recommendation:
We are aware that pubcos, as landlords, do not have
the right to unreasonably withhold consent to assignment by tenants
and can only offer advice to these prospective tenants. Pubcos
should insist that tenants assigning leases provide prospective
tenants with the same level of information that their pubco would
provide.
Prospective tenants entering the trade through lease
assignment should not sign agreements until they are fully aware
of an incumbent's annual profit and loss accounts for the business
they are purchasing. They should also contact the pubco for information
they believe is not forthcoming from their assignor. [42]
35. Our 2009 Report returned to this matter
and noted the perceived problem that assignments from outgoing
lessees, as opposed to leases direct from a pub company, were
a cause of disputes. Our Report concluded that greater levels
of information needed to be provided by both sides:
We accept that in many cases pubcos do not have access
to their lessees' books. However, they have access to a substantial
amount of information about the business of a particular pub,
and are likely to have extensive information if a business is
in difficulties. Pubcos entering a commercial relationship with
a new lessee should be required to share all their information
on a pub's trading history with them.[43]
36. The new Framework Code states that:
The assignment of leases places obligations on both
the pub company and the lessee wishing to assign his lease (assignor).
This is to ensure that the potential purchaser of the lease (assignee)
is supplied with the same information as would be supplied by
the landlord at the commencement of a lease and is able to take
his own proper business decisions about the business being offered.[44]
37. Lessee groups believe that the new Code places
significant obligations on lessees. The Fair Pint Campaign said:
By restricting the freedom of lessees to sell their
interests, the framework seeks to impose new onerous conditions
on lessees. In return the lessee gets nothing from the landlord
apart from the promise to fulfil obligations which they should
be doing anyway.[45]
The IPC also argued that there was a risk that signing
a Code based on the Framework Document had the potential to undermine
a lessee's existing legal rights and remedies. It believed that
"professional advisers would advise clients not to sign such
an agreement."[46]
38. Pub companies and lessees have a responsibility
to assess the ability of a new entrant's ability to run a pub,
and to provide them with the necessary information to make an
informed decision. However, in doing so, the new Code should not
undermine the existing rights of the lessee. On the other hand,
many of the worst problems seem to arise from inappropriate assignments
and such assignments are bad for the industry, for the pub companies
and, crucially, for the new lessees.
39. The clauses in the Framework
Code of Practice regarding the assignment of leases are an attempt
to address our and our predecessor Committee's concerns. We note
the concerns expressed by lessees about the obligations it would
place upon them but we believe that the new Code represents a
step in the right direction. However, lessees' existing right
to assign their leases needs to be treated with the upmost consideration.
40. The BBPA and the lessee
organisations need to work together to develop processes in a
way which are mutually beneficial. Both sides must ensure that
the history of lack of trust and intimidating behaviour by pub
companies does not magnify disagreements on this issue and undermine
the Framework Code.
TRAINING AND PROFESSIONAL ADVICE
41. The new Framework Code of Practice sets out
the minimum level of training and professional advice which will
be required by a lessee before he or she can take over a pub.
The Code includes the following requirements to be met by a new
lessee:
Obtain accredited pre-entry training to enable them
to evaluate and understand the contract they are seeking to enter
into;
Demonstrate they have taken proper independent professional
advice prior to accepting a tenancy/lease (and during the operation
of the tenancy/lease whenever the need arises); and
Take professional legal and business advice which
should be used to prepare an appropriate business plan.[47]
42. The British Institute of Innkeeping (BII)
told us that it is currently working with industry to develop
a training course to ensure prospective lessees fully consider
their legal and operational responsibilities before they enter
into a lease. The BII's hope is that this "will give newcomers
the chance to take on a tenancy or lease fully aware of what they
are signing up to."[48]
43. Fair Pint recognised that training was important:
We agree that people should only enter any business
agreements once they have attained a good understanding of what
is required to run that business and a full understanding of what
they are committing themselves to.[49]
However, its members were concerned by a waiver in
the Code that allows for some lessees not to attend training and
concluded:
The requirements on pre-entry training are of little
value because the requirements can be waived at the company's
discretion. The criteria set down for waiving [
] seems broad
enough to potentially include most new entrants into the market.[50]
In response to that concern the BII stated that:
We recognise that in this industry there is a good
deal of movement of licensees between pubs and pub companies.
We feel it is entirely reasonable that [...] a new lessee/tenant
of a pub company who has current experience of running a lease
or tenancy may attract a waiver to such training.[51]
44. The introduction of a waiver represents a
pragmatic approach to dealing with existing lessees who have a
proven track record. It should not be used widely and liberally
for idle convenience. A high threshold must be met before a waiver
is issued, the criteria for which should be clear and publically
available.
45. We welcome the inclusion
of the clauses on training and professional advice in the Framework
Code which will greatly assist newcomers to the industry. We also
agree that experienced publicans should not have to undertake
basic training when taking on a new lease. We therefore understand
why a waiver has been included in the training clause of the Framework
Code of Practice. It is vital that both of these clauses are applied
rigourasly. We will expect the BBPA to introduce a system to monitor
use of the waiver and publish clear guidelines on its use by the
end of August 2010.
REGIONAL AND FAMILY BREWERS
46. We have received no evidence to suggest that
the tie is a cause of controversy or dispute between smaller regional
and family brewers and those who operate their tied estate. That
said, we have heard concerns from regional and family brewers
about compliance costs for the new Code.[52]
Bridgid Simmonds told us that the BBPA would be taking this into
account.[53] In addition,
the BII said that it would be giving initial assistance to all
applicants to the Code and that a permanent member of BII staff
would be visiting each company or brewery to discuss the production
of their Code and to explain how the scheme worked. It also told
us that BIIAB (the BII's accreditation board) would ensure codes
were in an appropriate state before submitting to its Benchmarking
Committee for accreditation.[54]
47. We welcome the fact that
the BII will work to help and advise smaller pub companies and
family brewers on the new Framework Code and the subsequent accreditation
process. We recommend that the BII monitor closely compliance
costs for regional and family brewers to ensure that these costs
remain reasonable.
UPWARD ONLY RENT REVIEWS
48. Both the 2004 Report and the 2009 Report
deprecated the use of upward only rent reviews (UORRs). The industry
has insisted that UORRs "have been a thing of the past since
2005."[55] Although
UORR clauses are a 'thing of the past' as far as new leases are
concerned the problem is that they still exist in old leases.
During the 2009 inquiry the pub companies told us that they would
not enforce these clauses and would provide 'comfort' letters
confirming this to their lessees. The BBPA asserted that such
letters were "legally binding."[56]
Pub companies have also offered lessees a deed of variation on
their leases to remove any UORR clauses although there was a legal
fee for this. However we continue to receive submissions arguing
that UORR clauses are being enforced.[57]
49. The BBPA argue that the new Code would put
an end to this matter:
Comfort letters will not now be necessary since,
as DLA Piper [BBPA's legal advisers] point out, company codes
will state categorically that any upward only enforcement clauses
remaining in leases will not be enforced.[58]
50. We recommend that where
leases have upward-only rent review clauses they should be removed
by a deed of variation, the cost of which should be borne by the
pub companies. This would also have the benefit of being binding
on a pub company's successor in title.
AWP MACHINES
51. Both the 2004 Report and the 2009 Report
recommended that the Amusement with Prizes (AWP)[59]
tie should be removed:
In 2004 the Trade and Industry Committee concluded
that "In our opinion, pubcos do not add sufficient extra
value from their deals to justify their claims to 50% of the takings
from AWP machines. We remain unconvinced that the benefits of
the AWP machine tie outweigh the income tenants forgo and we recommend
that the AWP machine tie be removed." That conclusion remains
valid.[60]
52. These recommendations were resisted by industry
which argued that both the pub company and the lessee make more
money when an AWP machine is tied. Mr Darby, the Managing Director
of Marston's Brewery, told us that a trial carried out for Marston's
demonstrated this to be the case. He argued that with non-tied
AWP machines:
AWP income rapidly diminishes because the tenant
seeks to reduce the rent on the machines in his pub by selecting
lower quality machines or opting for lesser levels of service
from the machine supplier.[61]
Mr Mallen, a member of the IPC, was not convinced
and commented that the BBPA appeared to suggest that "the
lessee can operate his business but he is not capable of managing
his own machines".[62]
He argued that the pub companies were only interested in maximising
their own profit:
For years they have taken upfront access payments;
they have refused to allow machine operators onto their list unless
they pay their weekly rents; they have taken a disproportionate
amount of the machine income over four years. I do not believe
we can leave the BBPA to manage these machines on our behalf.[63]
53. Although the AWP tie issue remains unresolved,
the new BBPA Framework Code contains a minor improvement to the
current position:
It will be made clear in the process of profit assessment
that where machines are tied machine income will not be included
in the "divisible balance".[64]
According to the BBPA this would result in a net
gain to a lessee with a £2,500 AWP income of £1,250.[65]
54. Removal of the AWP income
from the divisible balance is a belated step in the right direction.
It should never have been included in the divisible balance in
the first place. To take 50% of profit as part of the machine
tie and then 50% of the remaining profit as part of the divisible
balance is totally unacceptable.
55. However, the Framework Code does not address
the issue of royalty payments to pub companies by AWP machine
tie suppliers, an issue which was considered in the 2004 Report.[66]
And it does not seriously tackle the question of whether the tie
itself should be abolished. Mrs Nicholls of the IPC told us:
The Select Committee's recommendation in 2004 was
very clear. The benefits of the tie are not outweighed by the
restrictions imposed as a result of it. The BBPA suggestion does
not go far enough because it does not meet the fundamental recommendation
that the AWP tie should go.[67]
Fair Pint said that:
The fact that BBPA member companies have not even
been willing to consider getting rid of the AWP tie, which can't
be justified for any other reason other than it affords pub owning
companies the opportunity to extract more income from their estates,
is disappointing. It shows that pub companies are unwilling to
even make the smallest changes to the relationships with their
tenants which could in any way improve the fairness of the division
of pub profits.[68]
The Office of Fair Trading in its report following
CAMRA's super-complaint found that lessees were between £2,000
to £3,000 a year worse off as a result of the AWP tie.[69]
56. Karl Harrison from the IPC believed that
choice should be at the heart of any solution:
Why can we not be offered a range of choices? Some
publicans will feel more comfortable perhaps with that arrangement
[an AWP tie]; others will want to manage their own machines because
they are very good at it, but at the moment the choice is not
there.[70]
57. It is unacceptable that
pub companies have again failed to address the AWP tie or to seriously
offer free of tie options. If the AWP tie offers the benefits
claimed for it, offering such a choice on an informed basis would
demonstrate goodwill at little if any cost to the pub companies
as lessees will freely chose to retain the tied machines.
FLOW MONITORING EQUIPMENT
58. An issue of deep concern and anger during
our 2009 inquiry was the use of flow monitoring equipment (FME)
supplied by a company called Brulines to 'police' tied pubs. Flow
monitoring equipment is designed to monitor how many pints pass
through a pub's pipes. The pub company can use this data to compare
the amount of beer it has delivered to a pub against the amount
which has passed through the pumps. A difference can indicate
the possibility that additional beer, not bought through the tie,
is being dispensed.
59. Our 2009 Report found that the equipment
was not calibrated and that there was no external verification.
It concluded that "pubcos should not be allowed to rely on
data from Brulines equipment to enforce claims against lessees
accused of buying outside of the tie".[71]
This was compounded by reports of fines being direct-debited from
lessees' accounts before they had had an opportunity to query
the charges. Mr Harrison from the IPC believed that flow monitoring
equipment was "inaccurate;" "possibly unlawful"
and "used for intimidation."[72]
60. In respect of direct debits, the BBPA told
us:
We are assured by our members that direct debits
are not applied where transgressions against buying-out are concerned
without the consent of the tenant or lessee concerned.[73]
This is a bold statement and one which we, and our
successor Committee, will continue to monitor in great detail.
61. The new Framework Code of Practice has, in
part, addressed our concerns. It includes a suggested protocol
which sets out "the terms under which flow monitoring equipment
may be installed and any further prima facie evidence available."[74]
Annex A of the Code offers a list of what might be included
in a company's protocol:
- Details of data to be shared
with tenant/lessee and frequency;
- Calibration/allowances and parameters for review;
- Evidence of buying-out, supported by the flow-monitoring
equipment;
- Procedures to be followed by the company in establishing
with the tenant/lessee that a breach has occurred;
- Penalties/sanctions to be applied in lieu of
forfeiture of lease in the event that a breach is determined;
- How any charges will be applied;
- Authorisation of FME personnel to be given access
to the premises and circumstances in which such access may be
denied;
- Tampering with equipment.[75]
BBPA Chief Executive, Brigid Simmonds, told us that
it would be for individual pub companies to write up their own
protocol, but that any protocol would have to be accredited by
the BII. Furthermore, she asserted that it had to be "transparent
and above board."[76]
62. The BBPA has stated that it did not want
to "anticipate" what evidence of buying out of the tie
should be but suggested it could include the presence of products
which were not supplied under the tie agreement, purchase evidence,
third party evidence and pump clips/keg caps from non-supplied
products.[77] The BBPA
also suggested that "covert intelligence, for example CCTV,
would be acceptable."[78]
63. The IPC claim that 'confessions' have been
used as additional evidence to Brulines data. It suggested that
these 'confessions' had been obtained under duress because "a
nominal fine and confession would probably be better than the
forfeiture of the lease which is what [the lessee] is being threatened
with".[79]
Mr Simon Clarke, representing the IPC, set out how he believed
such 'confessions' were collected:
The accusation is often conducted in an aggressive
way using electronically enhanced information from Brulines plc.
to threaten the tenant with legal action unless a "fine"
(usually of an arbitrary quantum) and an administrative charge
are paid, and a "confession" signed. The landlord will
often present the evidence obtained from Brulines as compelling
evidence against the tenant that will persuade a Court of the
tenant's breach rendering it hopeless for the tenant to offer
a defence or to go to the cost of doing so. The letters and draft
"confessions" from pub owning companies are worded in
such a way as to imply that remedies against the tenant, such
as judgement in the courts or forfeiture of the lease are mere
formalities when of course the landlord would need to properly
make out their case in the court in the usual way.[80]
64. Brulines stated that it is "significantly
more cautious when reviewing and assessing negative variances[81]
on cask products."[82]
Based on Brulines data from the previous three months "a
total of 6,259 customers' premises were visited by Brulines Customer
Account Managers as a result of having a negative variance or
other data trends requiring review. Of these, 2,368 (37%) were
assessed as having a negative variance requiring further investigation
which resulted in 1,381 (22%) admissions of buying outside the
tie."[83] Brulines
has provided us with the following table to demonstrate the cases
of negative variance that it has dealt with in the three months
and other evidence that was present to support claims that lessees
had bought 'out-of-tie':
Product Type or other reason
| Number of liquidated damages claims
| %
| Brulines system accuracy used in assessment
| Other evidence used to support the claim
|
Draught Keg and Cask Beer
| 1,251 | 90.5
| Yes | Product order history
Stock count
Foreign stock in Cellar
Best before and racking dates
Photographic evidence
|
Packaged Products | 441
| 31.9 | No
| Product order history
Stock count
Foreign stock in cellar or fridge
Best before dates
|
Tampering with the system
| 52 | 3.7
| No | Photographic evidence
Flow-meter bypasses
Secondary cellars
Unauthorised dispense equipment
|
Brulines
To assist understanding of the data in this table,
one full admission of buying out by a lessee may consist of draught
cask, keg and packaged product. This explains why claims by product
type do not reconcile to 100%.
In addition, Brulines informed us that:
The statistical evidence demonstrates that of the
6,259 sites visited by Brulines [
], only 1 in 5 Licensees
(22%) signed an admission of buying outside tie and that in these
cases further evidence of buying out was gathered to corroborate
the data. Of the 987 who did not sign, the data and supporting
evidence was passed to the Pub Company for review and action where
appropriate. 31.9% of buying out admissions did not even rely
on Brulines data or its accuracy as these comprised packaged products
which can only be evidenced by foreign stock found on the premises.[84]
65. We welcome the inclusion
in the Framework Code of the need for additional evidence above
and beyond the data from flow monitoring equipment in any accusation
of buying outside of the tie. However, such evidence must be physical
evidence and not merely a signed 'confession' by the lessee. In
relation to fines being taken by direct debit, without the authorisation
of lessees, the BBPA must give public and unambiguous direction
to its members that such a practice is incompatible with BBPA
membership.
Accuracy of data
66. The IPC reported that it had commissioned
a study by SGS[85] on
Brulines' flow monitoring equipment which found that the system
was "not fit for purpose, inaccurate and ought not to be
put to the use that it is being put".[86]
However, Brulines have responded that Titan Enterprises
(the manufacturer of the flow-meter), "completely refutes
both the SGS evaluation and methodology"[87]
and described the SGS report as being based on "assumptions
and poor science."[88]
67. Given the ongoing dispute about flow monitoring
equipment, and the importance placed on the information it produces,
regulation is crucial. Brulines told us:
Following a comprehensive assessment by Trading Standards
and LACORS[89] which
required Brulines to submit all its operating procedures and equipment,
Brulines was informed on 30th September 2009 that its equipment
is not prescribed under section 11 of the Weights and Measures
Act 1985 thus is not required to be passed as fit for use in trade.
But:
this does not mean that Brulines is unregulated.
Under section 17 of the Act there is an obligation on Brulines
to ensure that the equipment being used is neither "false
nor unjust.[90]
68. However, it seems that Trading Standards
officers in different areas are adopting entirely different approaches
from that outlined above. We received correspondence from Derbyshire
Trading Standards which suggested that beer flow monitoring equipment
does fall within the definition of 'use for trade'. It
recommended that there should be an agreed performance criteria
against which beer dispense systems could be evaluated.[91]
We also received a letter from a Trading Standards Officer in
Rotherham saying:
I am able to say that the equipment shown to me is
definitely not legal for trade use. [
] since about 2003
following initial verification no further testing of the equipment
has taken place. I have 40 years' experience as a weights and
measures inspector and in my opinion such a long period of use
without testing or verification of equipment is unacceptable to
claim confidence in its accuracy.[92]
LACORS have not made the issue any clearer. In correspondence
to Mr Clarke, one of our witnesses, LACORS stated that:
It is our view that this type of equipment may be
in use for trade, depending upon the exact nature of the contractual
relationship between the brewery and the landlord. This could
only be determined on a case by case basis as the legislation
is dependent on the individual circumstances in each case. If
it could be determined that the equipment was in use for trade,
it would be caught by S17 of the Act, and as such if a Trading
Standards Department could prove beyond all reasonable doubt,
that the equipment was false and unjust, they could take enforcement
action. It must be stressed however that any enforcement actions
are the responsibility of individual local authorities who have
to take into account a whole range of factors in determining the
appropriate course of action.[93]
69. The accuracy of data from
flow monitoring equipment and the analysis of that data are highly
contentious issues. Flow monitoring equipment could be a helpful
tool, for both pub companies and lessees but only if it is reliable
and has the confidence of both sides. Clearly this is not the
case at the moment. We recommend that the Government, through
the National Measurement Office, urgently clarifies the position
of beer flow monitoring equipment in relation to the Weights and
Measures Act 1985. Such equipment must be included under the Act
for calibration and verification purposes.
Conclusion
70. The new Framework Code of
Practice appears to be a modest step in the right direction. Of
necessity it provides a framework for companies of all sizes.
We expect the major pub companies to treat it as an absolute de-minimus
requirement and to significantly build on it with their own Codes.
Only by doing so will pub companies be able to demonstrate that
they are committed to reform. We recommend that our successor
committee, at an early opportunity in the next Parliament, assess
the extent to which pub companies have built on what is a bare
minimum of a Framework Code; and evaluate how effective the new
Code has been in improving the relationship between lessees and
pub companies. Previous codes have been weaker and not fully observed
by the pub companies. We will need to see compelling and continuing
evidence by June 2011 that the new codes are being observed and
enforced if our successor committee is not to recommend statutory
intervention.
22 Trade and Industry Committee, Second Report of Session
2004-04, Pub Companies, HC128, para 203 Back
23
Business and Enterprise Committee, Seventh Report of Session 2008-09,
Pub Companies, HC 26-II, Ev 187 Back
24
Business and Enterprise Committee, Seventh Report of Session 2008-09,
Pub Companies, HC 26-II, Ev 187 Back
25
Business and Enterprise Committee, Seventh Report of Session 2008-09,
Pub Companies, HC 26-I, para 156 Back
26
Ev 33 Back
27
Q 169 Back
28
Q 59? Back
29
Q 59 Back
30
Q 58 Back
31
BBPA, Framework Code of Practice on the Granting of
Tenancies and Leases, January 2010, p 5 Back
32
Ev 105 Back
33
Ev 105 Back
34
Ev 106 Back
35
Ev 107 Back
36
Ev 82 Back
37
Ev 137 Back
38
"FSB to urge MPs to break the beer tie"Morning Advertiser,
10 December 2009 Back
39
"FSB to urge MPs to break the beer tie"Morning Advertiser,
10 December 2009 Back
40
Ev 30 Back
41
Ev 105 Back
42
Trade and Industry Committee, Second Report of Session 2004-04,
Pub Companies, HC128,para 105-106 Back
43
Business and Enterprise Committee, Seventh Report of Session 2008-09,
Pub Companies, HC 26-I, para 54 Back
44
BBPA, Framework Code of Practice on the Granting of
Tenancies and Leases, January 2010, para 26 Back
45 Ev
84 Back
46 Ev
106 Back
47 BBPA,
Framework Code of Practice on the Granting of Tenancies
and Leases, January 2010, p 6 Back
48
Ev 44 Back
49
Ev 84 Back
50
Ev 85 Back
51 Ev
47 Back
52
Ev 91 Back
53
Q 59 Back
54
Ev 46 Back
55
Q 91 Back
56
Q 90 Back
57
Ev 69 Back
58
Ev 40 Back
59
Business and Enterprise Committee, Seventh Report of Session 2008-09,
Pub Companies, HC 26-I, para 103, Trade and Industry Committee,
Second Report of Session 2004-04, Pub Companies, HC 128,
para 129 Back
60
Business and Enterprise Committee, Seventh Report of Session 2008-09,
Pub Companies, HC 26-I,para 103 Back
61
Ev 40 Back
62
Q 209 Back
63
Q 209 Back
64
BBPA, Framework Code of Practice on the Granting of
Tenancies and Leases, January 2010, para 11 Back
65
Ev 41 Back
66
Trade and Industry Committee, Second Report of Session 2004-04,
Pub Companies, HC128, para 132 Back
67
Q 209 Back
68
Ev 84 Back
69
Office of Fair Trading, Response to CAMRA's super-complaint,
October 2009, para 5.52. Back
70
Q 211 Back
71
Business and Enterprise Committee, Seventh Report of Session 2008-09,
Pub Companies, HC 26-I,para 98 Back
72
Q196 Back
73
Ev 40 Back
74
BBPA, Framework Code of Practice on the Granting of
Tenancies and Leases, January 2010, para 5 Back
75
BBPA, Framework Code of Practice on the Granting of
Tenancies and Leases, January 2010, Annex A Back
76
Q 125 Back
77
Ev 43 Back
78
Ev 43 Back
79
Q 198 Back
80
Ev 65 Back
81
Negative variance is where flow monitoring data implies that more
beer has been dispensed through a pub's beer lines than has been
bought by the lessee from their pub company. Back
82
Ev 53 Back
83
Ev 53 Back
84
Ev 54 Back
85
Société Générale de Surveillance
is a publicly listed company providing verification, testing and
certification services. Back
86
Q 195 Back
87
Ev 51 Back
88
Ev 48 Back
89
Local Authorities Coordinators of Regulatory Services Back
90
Ev 48 Back
91
Not Printed Back
92
Q128 Back
93
Ev 134 Back
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