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

Supplementary evidence from the All Party Parliamentary Save the Pub Group

  The All Party Parliamentary Save the Pub Group made a full submission to the Committee last year as part of the evidence collected for last year's report on Pub Companies published in May last year.

  We commend the Committee for the leadership it has shown on this issue and I am pleased that this important subject is being looked at once again. Further to that, we wish to make clear that we still stand by that submission and also that we do not feel that the issue and the problems highlighted have changed since it was written.

  After the publication of your Committee's report the industry started a process of mediation in order to come up with a cross industry agreement in response to your Committee's concerns. Mediation failed because it was apparent the BBPA members were unwilling to offer any meaningful concessions to address the imbalance of risk and reward between tied tenants and pub owning companies which was the core of your Committee's concern about the how the industry operates.

  Now the BBPA (the British Beer and Pub Association) have published their "UK Pub Industry Framework Code of Practice" on the behaviour of Pub Companies and are asking for the committee not to recommend further action or referral to "give the industry" more time to resolve these issues ourselves.

  Members of the All Party Save the Pub believe that it would be a mistake to give the industry more time. We believe that the big owning companies (and hence the BBPA) have a clear strategy of playing for time in the hope that the risk of regulatory intervention into the market will pass.

  The BBPA code is not a "UK Pub Industry Code" as it has been presented and it is quite dishonest presenting it as such. The majority of pub trade organisations, including pub tenant and pub consumer organisations are not only not signed up to it, but believe it is merely an attempt to avoid much needed reform. The code applies only to BBPA's own members and the decision of Greene King, one of the big pub owning companies, to leave the BBPA, shows starkly that all even this is very limited. The code is not mandatory, even for those who do decide to stay within the BBPA, and it has no real sanction for companies that breach it.

  The Select Committee's investigation was in response to the failure of voluntary measures, including the strengthening of codes of practice in response to the Trade and Industry Select Committee's investigation in 2004. Crucially, the BBPA code simply does not deal with the Select Committee's core recommendations. Of the 25 recommendations made by the Committee last year, the BBPA code only addresses seven. Nothing in the code of practice will make a difference to the way in which the tie is currently operated and the huge gap in prices for beer and other products charged to tied tenants compared to the prices that the same products are available on the open market which makes it impossible for many tenants to make a living, despite in many cases having a healthy turnover.

  It is vital that everyone is clear who the BBPA represent. They are not the voice of the industry, yet try to give the impression that they are. They represent, perfectly legitimately, the big pub companies and big pub owning breweries who fund them and dictate their views. It is notable that the new Independent Pub Confederation, that includes nearly all the other pub trade association, including tenants and consumer organisations, do not believe the BBPA code will deal with the problems the Select Committee so powerfully highlighted and that real reform is desperately needed to rebalance the industry, give pub goers a better deal and to stem the tide of deliberate pub company closures that are taking away something of huge importance to communities and to our culture and heritage as a nation.

  So the Save the Pub Group urge the Committee to stand firm to your original conclusions that regulatory intervention is needed to ensure free competition in the pub sector and that the Minister should use his power under the Enterprise Act to refer the sector to the Competition Commission.

18 February 2010

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