Yesterday’s Government defeat over pub market rents will certainly have significant consequences – if it ever makes it through the House of Lords and then the likely legal challenges.
It is claimed that self-regulation has been working, though not all tenants would necessarily agree, but this is certainly a negative development for parts of the pub industry and a major distraction in the months to come.
Below, we show some of the reactions.
BBPA: changes made by MPs today are ‘hugely damaging’
Commenting on the Report Stage of the Small Business Bill in the House of Commons, Brigid Simmonds, BBPA Chief Executive, said:
“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 result in 1,400 more pubs closing, with 7,000 job losses – as the Government’s own research shows.
“There are serious legal and competition issues which must be faced, as it rides roughshod over what are previously agreed contracts, and creates an unworkable, two-tier market.
“I hope Parliament will rethink as the bill continues its progress.
“On the issue of family brewers remaining outside the scope of the Code, we have always taken the view that their inclusion is not necessary, provided that this does not result in a distortion to competition.
“As the Government is now saying it will not include these smaller companies it needs to ensure a level playing field throughout the legislation.”
CAMRA: Landmark victory for beer drinkers, pub goers and licensees
Tim Page, CAMRA Chief Executive said:
“Today’s landmark Parliamentary vote helps secure the future of pubs. CAMRA is delighted that, after ten years of our campaigning, MPs have today voted to introduce a market rent only option for licensees tied to the large pub companies – a move that will secure the future of the Great British Pub.
“The Government was defeated by 284 votes to 269 with MPs from all parties voting in favour of a new clause to the Small Business Bill that will empower pubco licensees to choose between a tied agreement and a market rent only agreement that will allow them to buy beer on the open market. 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. The large pub companies will no longer be able to charge their tenants prices up to 60 pence a pint higher than open market prices.
“This simple choice should spell the end of pubco licensees being forced out of business through high rents and tied product prices.”
Enterprise Inns: serious unintended consequences
Simon Townsend, Chief Executive Officer, said:
“This amendment, which was not supported by the Government, threatens to have serious unintended consequences for publicans and the industry at large.
“The Government completed a thorough and extensive review of how best to enhance protection for tied tenants. As a result, it rejected the “market rent only” option as damaging to pubs, communities and the wider industry. Independent economic research, commissioned by the Government, found that a “market rent only” option would lead to widespread pub closures, significant job losses and reduced investment in the sector.
“This amendment is a disproportionate response which proposes fundamental change that is wholly contrary to the findings of the consultation, from which the Bill was drawn up.
“We continue to believe the tie offers the best operating model for the vast majority of our publicans and, as we made clear in reporting our Preliminary Results yesterday, we take a flexible approach to all our lease and tenancy agreements and the proactive management of our wider property portfolio.
“In light of yesterday’s vote we will continue to assess all options to safeguard the interests of both our publicans and shareholders. In the meantime we will monitor the situation closely and await the Government’s response to this unwelcome development.”