Pub companies: follow-up - Business, Innovation and Skills Committee Contents

Memorandum submitted by The All Party Parliamentary Save the Pub Group


  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.


  2.1  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.


  3.1  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.


  4.1  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.


  5.1  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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