Written evidence submitted by the Institute
for Public Policy Research (IPPR)
In January 2011 IPPR was commissioned on behalf of
CAMRA and the Campaign for a Fair Pint to investigate the current
status of the tied pub industry. This memo presents several of
the preliminary findings which will be released in a final report
due to be published in July 2011. The following observations are
based on a poll of 424 tenants of tied pub outlets conducted by
CGA Strategy in April 2011.[26]
MANAGEMENT AND
EXPERIENCE
— Nearly
two-thirds of all tied tenants have managed their pub for more
than three years. 15% however have been managing their pub for
less than 1 year while the remaining 17% have had their pub between
one and three years.
— When
tied tenants were asked how much longer they plan to manage their
pub there appears to be some doubt about longevity. 1 in 3 tenants
do not believe they will continue to manage their pub after three
years with 14% predicting they will no longer hold the pub within
one year.
— 3 in
4 tied tenants have had experience in the pub industry prior to
managing their current pub. The core of respondents that did not
have prior experience—37%—had worked in a "professional"
category, this includes office workers, teachers and managers.
11% had previous catering experience.
— 42%
of tied tenants said they did not have any training before they
signed their lease. Tenants who have not had any industry experience
or training equate to roughly 10% of all tied pub outlets.
FINANCIAL STABILITY
— A significant
number of tied respondents—46%—claimed that they earn
less than £15,000 per annum. Only 11% claimed their personal
income was over £30,000 per year.
— A majority
of all tied tenants—58%—state that they are financially
struggling.
— When
investigating the reasons causing financial instability, 90% of
tenants facing difficulties blamed the recession. 88% of these
respondents noted the strain of the beer-tie, followed by 87%
mentioning competition from supermarket pricing.
— When
investigating the tied model further, IPPR calculations show 78
per cent of those who mentioned the beer-tie as affecting their
financial stability also mentioned the cost of rent as a contributing
factor. The claim that lower costs in the dry rent offset the
beer-tie is not a view shared by an overwhelming majority of tied
tenants.
PUBCO EVALUATION
— Approximately
one-third of all tied tenants have not received information relating
to their Pubco's code of practice.
— A vast
majority of tied tenants—71%—believe that the new
code of practice will have no significant effect on their business
while only 17% believe it will benefit them.
— Just
36% of tied tenants believe that a dispute with their Pubco would
be dealt with fairly. 40% of tied tenants do not know if their
Pubco would objectively deal with a dispute, indicating a lack
of consultation regarding guidelines and procedures for such matters
between companies and tenants.
— Only
1 in 3 tenants believe that their Pubco offers any value to their
business. The majority—52%—claim their Pubco adds
no value while 16% are unsure.
— Of
the minority that claim their Pubco does add value 86% indicate
provision of business training as the most noted reason. Recognition
of brand name was stated by 59% of these respondents followed
by general training with 57%.
26 All of the major pub companies are represented in
this sample, varying according to their proportion of the market. Back
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