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

Supplementary memorandum submitted by BBPA

  Thank you for the opportunity to follow up the evidence session from Alistair Darby and myself with a letter of clarification on a few key points. I am writing at this stage with what I consider an interim letter in order to clarify a few issues before the House rises for Christmas, but there will be more information to follow in the New Year.


  We all agree that it is vital to be able to enforce the new Code of Conduct. We are seeking legal confirmation about the admissibility in court of a breach or misrepresentation of the contract on individual company codes.

  I would however like to explain how we expect this to work. The Industry Framework Code will be used by individual companies to develop new and modify existing codes for their tenants and lessees. It is expected that the Company Code would then exist as a "side agreement" to the contract signed by the Pub Company and lessee or tenant. As such, if either party went to court for breach or misrepresentation then there is no doubt that failure to follow the Code would be admissible in court. We will provide further clarification from our lawyers.

  In addition to this legal stance, BII will be accrediting, monitoring and taking action with companies who breach the Code, acting for individual tenants or lessees. We believe these two actions acting in tandem provide not only transparency, but real teeth for the new Codes.


  Questions have been asked about the ability of BII to provide independent advice and action against pub companies who breach their Codes. I will ask their Chief Executive to write to you, but re-iterate that contributions to BII from pub companies are directly connected with training and the activities of BII as a Professional Body for the industry and in no way impinges on the independence of the BII.. We are firmly of the belief that BII will undertake all the actions promised in their letter to you and to which I referred during oral evidence to monitor and take proactive action to help tenants and lessees.


  The Pub Independent Rent Review Scheme (PIRRS) is now operational and offers a low cost review of rents for lessees and tenants. We had promised to clarify the enforceability of the scheme. The independent review is bought into play where a tenant or lessee is unhappy with the rent review being sought by the company. Application to the scheme is made by the tenant or lessee and by so doing waives the right to take the dispute to arbitration and agrees to be bound by the decision of the expert valuer as does the company. The decision is binding on both parties and there is no appeal. We can supply further details of how the scheme operates if that would be helpful.


  Conflicting statements were made as between the BBPA and the IPC at the Select Committee about whether the BBPA were aware of an issue to do with direct debits in relation to Brulines equipment. Whilst it is possible that this matter was raised with me early on in my role as Chief Executive of the BBPA I do not recall this having been the case. If it was, the technical nature of the issue was not clear to me at that early stage and I therefore stand by my evidence last week in which I said that I was unaware of the issue. Indeed, there is no recent correspondence that I have seen which indicates that this has been a matter of particular concern.

  I have since explored this issue in more detail. Payment for beer usage is usually made by direct debit. As you will be aware the new Industry Code requires members of the BBPA to have a protocol in their company code to deal with any evidence which suggests that a lessee or tenant is buying outside the tie. This must include other evidence that malpractice is taking place (such as evidence of other kegs or casks) etc. If other evidence exists and the licensee admits guilt (without coercion) then they are asked to sign papers agreeing to pay extra to the pub company. What would be totally unacceptable would be either coercion of licensees in any way or actions being taken without proper evidence [or funds being withdrawn without permission].

  We will explore this point further with our members and come back to you with further comments in the New Year.


  The length of time before a review is clearly a matter of judgement. In suggesting a two year period I was simply making the point that we do need time to implement the Code and some time must pass before the effect of that can be audited. The BBPA would of course be pleased to meet with your Committee at any stage to reassure that both the BBPA and our member companies really are implementing the new Code

  I hope this is a useful interim response before Christmas and look forward to writing to you again in the New Year.

14 December 2009

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