FSB joins forces with pubs to demand justice for landlords
Jun 4 2009 by Tom Scotney, Birmingham Post
The Federation of Small Businesses has joined forces with a coalition of pub owners to launch a campaign for Government action over unfair practices by pub companies.
Last month the Parliamentary Business and Enterprise Committee criticised the way “pubcos” such as Solihull-based Enterprise Inns and Staffordshire’s Punch Taverns managed their rosters of tenant-managed pubs.
The FSB, backed by the Fair Pint Campaign, is now urging the Government to refer the matter to the Competition Commission.
They say the tie between pubcos and landlords means tenants are forced to buy beer from the company owning their pubs at much higher prices than for the same products on the open market.
Pubcos have incurred high levels of debt while building up their property portfolios and been forced into taking drastic action in recent months to try to build up their cash position.
The BEC committee, led by MP Peter Luff (Con Mid Worcestershire), reported in mid-May, and was critical of the link between pubcos and their tenants.
The report said the tie was making it difficult for landlords to make a living, with two-thirds earning less than £15,000 from their pubs despite in many cases having a turnover in excess of £500,000. The report also showed that the tie raised the cost of beer for consumers and reduced choice. It recommended that the Government referred the tie to the Competition Commission and that it took action to increase the fairness of the relationship between publicans and their landlords.
The Fair Pint Campaign and the FSB are calling on their members to take action and write to their MPs expressing their concern about the pub company tie and demand that it be lifted.
David Caro, West Midlands policy chairman for the FSB, said: “Given the number of our members who have highlighted the problems they are facing it is very disappointing that our publicans aren’t getting a fair deal.”
Steve Corbett, a tied tenant and founder member of the Fair Pint campaign, added: “The Business and Enterprise Select Committee has exposed the unfairness of the tie. Their report made it clear that tied arrangements are not fair and the high cost of beer combined with high rents means publicans are struggling to earn even the equivalent of the national minimum wage from their pubs.
“If we are going to secure the future of pubs in the UK it is important that the Government takes action to respond to the recommendations of the select committee by referring the tie to the Competition Commission and by introducing a statutory code of practice to improve the fairness of the relationship between lessees and the pub owners.
“We are delighted to be working with the FSB on this national campaign to persuade publicans and all those who care about the future of the British pub to write to their MP asking them to put pressure on Lord Mandelson to adopt the recommendations of the Select Committee report.”
About 40 pubs a week are closing, with the industry under pressure from the collapse in consumer confidence, the smoking ban and competition from supermarkets and national chains such as Wetherspoons.
The Campaign for Real Ale wants the Office of Fair Trading to investigate the pubco-tenant link.
