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FSB welcomes independent adjudicator and statutory code of practice for pub industry
Friday 11th January, 2013

Government’s pubco u-turn a step in the right direction for region’s landlords and pubs, says Federation

The Federation of Small Businesses is welcoming the Government’s decision to create an independent adjudicator and statutory code of practice to protect pubs from their large pubco owners, which often squeeze landlords by imposing restrictive ‘beer tie’ contracts forcing them to pay steep rents and buy tied products at hugely inflated prices.

Towards the end of 2012, following years of representation by the FSB and other bodies – including the Business Innovation and Skills Committee - arguing that pubcos should not be allowed to continue policing themselves and that an adjudicator and code were urgently required, a Government report failed to act.

However, ministers were forced to reconsider following a Freedom of Information request submitted by the Parliamentary Save the Pub Group, Chaired by MP Greg Mulholland, which produced evidence suggesting ministers colluded with pubcos – namely their representative body the British Beer and Pub Association (BBPA) - while failing to consult groups truly representing landlords, including the Independent Pub Confederation (IPC) and CAMRA.

John Allan, Chairman of FSB Merseyside, West Cheshire and Wigan said: “This move is a victory for landlords struggling because of the appalling behaviour of their pubco owners, and a victory for common sense.

“It could not be clearer that pub industry self-policing has failed and continues to fail and it is pleasing the Government has finally woken up to what is going on, to the damage being done by an industry model based on pubcos squeezing the life out of their own landlords.

“A truly independent adjudicator overseeing a code of conduct enshrined in law is the only way we are going to protect and save this region’s treasured pubs –and that really is what’s at stake.

“You only have to look at the success of microbreweries – and the growth of free-of-tie pubs compared to their tied competitors – to see the potential in the pub industry. For the sake of pubs and the economy as a whole it is important the barriers created by a failed industry model are removed by the adjudicator and code of practice.”

"The Government now needs to set out how in practice it intends to achieve the worthy aim that a tied licensee should be no worse off than a free-of-tie-licensee. We look forward to working with Government to determine this. While at this stage the Code will not mandate a 'free-of-tie' option with an open market rent review, we would hope that all options remain on the table for future discussions."

The Government’s November 2011 report, which failed to tackle the beer tie issue at all, argued that there was ‘little evidence to indicate that tied pubs are more likely to close' - despite research from CAMRA showing that, while the number of tied pubs had fallen by 3,216 since December 2008, 425 new free-of-tie pubs actually opened.

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