Small Business, Enterprise and Employment Bill

Written evidence submitted by the Society of Independent Brewers (SB 22)

1.0. I am writing to the Public Bill Committee as Managing Director of the Society of Independent Brewers (SIBA). Formed in 1980, SIBA is a trade association representing nearly 800 independent brewing companies, the huge majority of which are micro and small businesses.

1.1. SIBA welcomes the aims of the Bill and its objectives to support small businesses. However, we wish to raise our concerns regarding the proposed pubs adjudicator and statutory code and its likely impact on our small business members, which own one or more pubs which are leased or tenanted and tied to the company. We note that and welcome the fact that the legislation will not apply to micro businesses.

1.2. While we agree with the principle that tenants and leaseholders should be protected to enable a genuine working partnership to exist between pub landlords and tenants/ leaseholders we do not believe it is justifiable to require small vertically integrated businesses, often with only one tied pub, to be subject to legislation designed to deal with concerns relating to larger pub-owning companies. It is clearly against the principles of the Bill to ‘support small businesses by cutting bureaucracy…’ to burden small businesses with the costs associated with the core statutory code.

1.3. Small brewers compete in a very crowded marketplace, often with companies much larger than themselves and with substantial pub estates to provide guaranteed access to market. Our small business members should be able to purchase and run pubs with the minimum of regulatory burdens and the proposed legislation would hinder that process and their ability to grow.

1.4. We are concerned that an unintended consequence is that the legislation could act as a disincentive to growth for businesses which may be approaching a headcount of ten employees.

1.5. It is also very likely that more brewers will acquire pubs in the near future and it is our view that the impact of legislation could be a disincentive to that growth.

1.6. In order to ensure that small businesses are not unnecessarily affected by the legislation we propose that (as well as micro businesses) small vertically integrated brewing businesses with fewer than ten tied pubs are exempt from the Statutory Code and that this threshold should be reviewed within the timescale proposed by the Government. This requires an amendment to clause 60.1 to define small pub owning businesses as those with more than ten tied pubs.

1.7. I understand that the Independent Family Brewers of Britain and the British Beer and Pub Association have written to the Committee requesting that companies with fewer than 500 tied pubs are made exempt from the Statutory Code (assuming there is no material impact on competition) in order to remove the costs and red tape associated with the statutory code. Several brewers are members of both the IFBB and SIBA. We support this position as a means of dealing with our concerns, as well as those of the family brewers.

1.8. I hope that you will agree that small brewery businesses should not be burdened by this legislation and that the Bill should be amended to prevent this.

October 2014