Pub landlords tied to big breweries win ‘historic victory’ in Commons Bill

3 December 2014

By Elizabeth Anderson, Business Reporter ****Source The Telegraph 18th Nov 2014 **

Pub landlords have won a “historic victory” over changes to their relationship with the big breweries, which could set them free from the controversial “beer tie” system, business groups have claimed.
The system, with its restrictions on the purchase of drinks from competitors and limits on freedom of rent agreements, has been blamed for the increase in pub closures, uncompetitive prices and the failure to attract more tenants.

However, pub trade body the British Beer & Pub Association (BBPA) has said the changes will be “hugely damaging” to the industry and could result in 7,000 job losses.
MPs on Tuesday backed the amendment to the Small Business Bill tabled by Lib Dem MP Greg Mulholland, which aimed to help to secure fair rents and cheaper beer prices for licencees tied to big pub companies.
Almost 20,000 pubs have shut over the past 20 years and a survey by the Campaign for Real Ale showed almost 60pc of landlords in tied tenancies earned less than the national minimum wage equivalent salary of £10,000 a year.

Under the new Bill, publicans would have the right to take any pay disputes to an independent adjudicator, who would have the power to enforce the new code.
All tied tenants would have the right to request a rent review if they have not had one for five years. An amendment added by Coalition MPs would also allow all pub landlords to buy beer on the open market.

Landlords that lease pubs from large companies say this could save them 60p a pint.
The Campaign for Real Ale, which has campaigned for 10 years for the changes, said it was a “victory” for beer drinkers, pub goers and licensees.
“Allowing over 13,000 pub tenants tied to the large pub companies the option of buying beer on the open market at competitive prices will help keep pubs open and ensure the cost of a pint to consumers remains affordable,” said CAMRA chief executive Tim Page.
However, industry body the British Beer & Pub Association, whose members own around 20,000 of the nation’s pubs, said the changes could do more damage to the already troubled industry.
“This change effectively breaks the ‘beer tie’, which has served Britain’s unique pub industry well for nearly 400 years. It would hugely damage investment, jobs, and results in 1,400 more pubs closing, with 7,000 job losses – as the Government’s own research shows,” BBPA’s chief executive Brigid Simmonds said in a statement.
Mr Mulholland had accused the trade body of “scaremongering”. “The big brewers and pubco association… have been lobbying vociferously with a whole stream of utterly baseless comments,” he said in his speech to the House of Commons.
Heineken, the brewery group whose Star Pubs & Bars unit has 1,300 leased premises, said the proposals “would threaten that partnership and make it more difficult for people to enter the market and own their own pub. We urge Parliament to think again before this poorly thought out proposal becomes law”.