Memorandum submitted by The All Party
Parliamentary Save the Pub Group
1. ABSTRACT
1.1 This memorandum supplements the evidence
submitted by the All Party Parliamentary Save the Pub Group on
25 March 2009. The Save the Pub Group campaign for a fair deal
for pubs. We are active in helping to preserve pubs as a corner-stone
of sustainable communities.
1.2 This memorandum focuses on varying approaches
suggested by the British Beer and Pub Association ("BBPA")
and the Independent Pub Confederation (IPC). The Save the Pub
Group believes that real reform is needed, not just window dressing
by way of a voluntary code.
2. RECENT DEVELOPMENTS
2.1 The Committee will be familiar with
the recent Office of Fair Trade Report on the Campaign for Real
Ale's ("CAMRA") super-complaint. The Save the Pub Group
is of the opinion that this report failed to take full and proper
account of the evidence submitted, with excessive weight being
placed upon the submissions of large pubcos.
2.2 The BBPA has recently proposed a voluntary
code of practice as a way to allow the industry to effectively
self-regulate. Despite unusually draconian restrictions governing
its publication, this code has recently been made public.
2.3 Following unsuccessful attempts at mediation,
the Independent Pub Confederation was launched. This has been
warmly welcomed by the Save the Pub Group as a way to bring together
groups representing tenants and small brewers.
3. THE BBPA'S
PROPOSED CODE
3.1 The Save the Pub Group has grave concerns
about the way the information has been allowed to trickle out.
If this is a serious code designed to move the industry forward,
we believe it should have been submitted for full consultation
so that interested groups could consider it and add their input.
3.2 In principle, the Save the Pub Group
believes that a voluntary code is an ineffective. Despite the
previous report of the Committee, the number of pubs closing continues
to skyrocket. The proposed code includes points which were in
the 2004 Trade and Industry Select Committee Report which
were almost entirely ignored by the industry, and other clauses
which are simply good practice and should already be in place.
The report will not address the fundamental imbalance inherent
in the tied relationship as it currently exists. The industry
is in crisis; a voluntary code has little hope of changing the
ingrained business habits of the larger pubcos.
4. IPC'S PROPOSALS
4.1 The Save the Pub Group supports the
proposals of the IPC in their manifesto proposals, including:
4.1.1 Lessees being given the option of going
free of the beer supply tie.
4.1.2 Should there be a beer tie, all other product
ties should be severely restricted with lessees being offered
a guest beer sourced direct from a small brewer.
4.1.3 The establishment of new rent valuation
guidelines.
4.1.4 The principle that the tied tenant should
be no financially worse off than a tenant who is free of tie.
4.1.5 The establishment of minimum standards
of fairness, disclosure and transparency in the handling of rent
negotiations.
4.1.6 The establishment of representative lessee
forums to discuss issues of concern.
4.1.7 The removal the Amusement With Prizes (AWP)
tie from all long leases.
4.1.8 To have a legally binding code of practice.
4.2 The final point is of key importance.
The Save the Pub Group believes that the only constructive way
to achieve progress in the industry is to have a compulsory code.
5. CONCLUSION
5.1 Pubs are under fire. In every village,
in every town, in every city across the country a pub used to
stand at the heart of each community, bringing people and societies
together. The cold business practice of an unfair tie, standing
like a Goliath in the trade, is chipping away at the pubs they
are meant to support.
5.2 The availability of cheap alcohol in
supermarkets, the economic downturn and the smoking ban may have
affected the industry, but it is the pub tie which is more influential
than any other single factor in the wildfire closure of pubs.
The extortionate prices for drinks charged by the pubcos, with
an absence of support in the bad times, slashes the profits from
previously prosperous establishments.
5.3 The BBPA's voluntary code is simply
rearranging deckchairs; it will not stop the ship sinking. It
is a sticking plaster too easily disregarded by their masters,
the large pubcos, where it does not suit. Big companies have shown
that they are unwilling and unable to bring forward the kind of
changes to save pubs that are currently closing (temporarily and
permanently) because of the tied system as operated by some companies.
5.4 The IPC's proposals are the only way
for the trade to be properly regulated. The fact that the BBPA
(who represent the big pubcos and breweries) are not prepared
to support the proposals means that intervention by the Committee
will be necessary. It may in time be necessary for the Competition
Commission to also be involved, however we cannot wait that long
so the Government must act soon to arrest the decline of community
pubs. many of which are viable in the right hands.
5.5 The Save the Pub Group therefore hopes
that the Committee will place the greatest weight on the IPC's
submissions in preference to the BBPA.
25 November 2009
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