Ten years on from a vote in the House of Commons to give pubco publicans a market rent only (free-of-tie) lease option, campaigners are still waiting for action.
The Campaign for Pubs says that the Pubs Code in England and Wales has been a failure, and they are calling on the Government to act.
The Pubs Code was supposed to stamp out the exploitation of tenants of large pub companies (pubcos) through the ‘tie’. But the weak and flawed legislation has not only failed to do this, says the campaign, it has allowed the pubcos to thwart and even evict tenants seeking to exercise their rights under the code.
They are also actively moving their estates away from traditional regulated leaseholds and towards new so-called ‘self-employed management’ models to avoid the Pubs Code altogether.
The Campaign for Pubs has written to the Secretary of State for Business and Trade, Jonathan Reynolds MP, urging the government to act to deal with this, and to finally deliver what Parliament and pub tenants were promised in 2014. The Labour party in opposition — including Jonathan Reynolds — supported the introduction of the Pubs Code and the vote for a market rent only (MRO) option.
The MRO option clause was introduced to the House of Commons by Greg Mulholland, then the MP for Leeds North West, who is now the campaign director of the Campaign for Pubs and chair of the British Pub Confederation.
The Pubs Code legislation, including the vital MRO option, was cynically watered down by the majority Conservative government that took control after the 2015 general election, says the campaign.
The way forward?
The Campaign for Pubs is calling for the following changes:
The failing Pubs Code and Pubs Code adjudicator legislation must be reformed
- The law must be changed to introduce a genuine market rent only option. The ability for all pubco tenants to be able to go free-of-tie on an independently assessed market rent after 90 days of requesting it.
- The Pubs Code must be extended to apply to all tenants of all companies with 500 or more pubs, not just tied tenants, to put a stop to the discrimination and abuse of tenants choosing to go free-of-tie.
- The legislation must be strengthened to establish a genuine Pubs Code adjudicator, to properly oversee the sector and stamp out all abusive and unfair practices, with proper powers to adjudicate and a clear and strong brief to ensure fairness and a fair share of risk and reward.
There must be wider, simple reform of the tie, to stop the abuse altogether
- The tie — charging above market prices and preventing direct access to products and services — can only possibly ever be justified if the pub rent is commensurately lowered to cover the additional cost of tied prices and restrictions. This means that all tied tenants must have the right to an annual independent rent assessment, in order to ensure that tied rents are at a level that compensates for higher tied prices.
- The tie should only be lawful when operated by breweries who brew their own beer (not under licence) and on their beer only. There is no justification for non-brewing property companies operating the tie and this, in itself, has been a serious anti-competitive and abusive restraint of trade.
“The Labour Party, including Jonathan Reynolds, fully supported the introduction of the Pubs Code and the all-important market rent only option.,” said Victoria MacDonald, a Campaign for Pubs national executive committee member and publican.
“In the knowledge that the Conservative government deliberately neutered this important legislation, it is now the clear duty for this Labour government to change the law to finally stamp out abuse of the beer tie and the ongoing exploitation of hard-working pub tenants.”
