The pubs code adjudicator has fined Heineken £2 million for forcing publicans through its pubs business, Star, to sell ‘unreasonable’ amounts of its own beer brands.
The investigation found Heineken imposed unfair conditions on landlords who sought to go ‘free of tie’ via a process that allows them to break a centuries old beer tie arrangement where they receive reduced pub rents in return for stocking specific beers.
The beer tie has been routinely criticised by pub owners, who say it has been continually manipulated by pub groups able to afford to flout the ‘spirit’ of the code that supposedly was set up to govern it.
The investigation also found that Star had its own ‘code compliance officer’ to ensure the code was interpreted to the commercial benefit of Heineken.
Following the ruling the industry body said Heineken had ‘seriously and repeatedly’ contravened codes. Codes designed explicitly to protect publicans from behaviour by pub groups aimed to exclude pub tenants from selling competitors brands.
The investigation was conducted over more than a year and now concluded the pubs code adjudicator found that through its pubs business, Star, Heineken had broken the rules repeatedly, and did so despite the pub regulator’s repeated interventions. Adding that Star Pubs and Bars had been given opportunities to improve matters “but intentionally or negligently failed to do so”.
The pubs code adjudicator, Fiona Dickie, said of the ruling: “The report of my investigation is a game changer. It demonstrates that the regulator can and will act robustly to protect the rights that parliament has given to tied tenants.
“I will be holding discussions with all the companies I regulate following my findings about how they will ensure they are code compliant. My message is that if anyone previously had any doubts about my resolution to act when I find breaches, they can have no doubt now.”
Dickie referring directly to Heineken said: “It failed to heed statutory advice, the PCA’s regulatory engagement and learnings from arbitration awards. It did not engage frankly and transparently with its tenants or meet the standards required of a regulated business when engaging with the PCA.
“Where it did change its approach, the efforts it made to comply were for the most part inadequate and not credible.”
Star Pubs and Bars responded by saying it was “deeply disappointed and frustrated” at the outcome of the investigation.
Lawson Mountstevens, MD, Star Pubs and Bars said of the investigation’s report: “There are many aspects of the report that we fundamentally disagree with and we are actively considering an appeal.”
“We are dedicated to the Pubs Code in both word and spirit, and do not believe the outcome of this investigation accurately reflects the culture of our business or the good working relationship we have with the vast majority of our licensees.”
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Hospitality & Catering News: Heineken pubs code adjudicator – 16 October 2020 – Heineken pubs code adjudicator
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