Further written evidence submitted by
Greg Mulholland
MP on behalf of the All Party
Parliamentary Save the Pub Group
I am writing to you on behalf of the All-Party Parliamentary
Save the Pub Group following the successful BIS Select Committee
this week to inform you of contradictions in statements made by
Ted Tuppen regarding his compliance with RICS guidelines.
David Rusholme, Director of Valuation at the Royal
Institution of Chartered Surveyors, confirmed at the first Select
Committee last week that RICS guidelines mandated "the tied
tenant should be no worse off than the free of tie tenant."
Guidance 7.18 reads "The tenant may compare
its own property with the circumstances of being free of a supply
tie and consider the profit achievable under those circumstances."
7.19 states, "The REO may have regard to
the fact that free houses are available in the market. Therefore,
it could expect to make an increased profit as a result of being
able to buy products in the open market and not at the prices
charged by the supply tying landlord or its nominated supplier."
And Guidance 7.21 confirms, "Comparability
between public houses held on different lease terms and with different
supply terms is problematic, particularly between the tied and
non-tied sectors. There is nothing within this guidance that should
result in rents in one sector being set at any advantage or disadvantage
to another."
At the second hearing this week, Ted Tuppen stated
that he agreed with the way rents were assessed by RICS and that
all Enterprise Inns rent assessments were in accordance with RICS
guidance. However, Mr Tuppen also disagreed with the principle
that the tied tenant should not be worse off than the free of
tie tenant.
It must follow then that Mr Tuppen does not, in fact,
agree with the way rents are set by RICS, and that Enterprise
Inns rent assessments do not conform to these standards.
The statements made by Mr Tuppen and other pubcos
heads, illustrate a sad reality that these companies either can't
or won't implement the Select Committee's directives to avoid
government intervention. Enterprise Inns has had over a year to
act in accordance with new RICS guidance, and they have failed
to do so. Now is the time for a statutory code to correct this
market abuse.
8 July 2011
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