Vince Cable calls time on the pubcos
Added: Wednesday, January 9th 2013
Business Secretary Vince Cable (right) has come to the aid of the British pub with plans for an independent adjudicator to investigate unfair practices in the trade. He says he will also introduce a statutory code governing the relationship between pub companies and publicans. The code will be enforceable by the new adjudicator.
Dr Cable’s move is the result of a long parliamentary campaign by Lib Dem MP Greg Mulholland, supported by the Business Select Committee. The code will cover fair practices, including rents and the prices publicans pay for beer. The adjudicator will have the power to investigate and deal with disputes between pubcos and publicans, and in some cases impose fines.
The new code is in response to claims that pubcos abuse the beer tie, by which publicans sell particular brands of beer. The code will enshrine the principle that a licensee tied to a pubco should be no worse off than a free trade licensee who can buy from a variety of providers.
Dr Cable said: “There is some real hardship in the pubs sector, with many pubs going to the wall as publicans struggle to survive on tiny margins. Some of this is due to pubcos exploiting and squeezing their tenants by unfair practices and a focus on short-term profits.
“The Labour government oversaw three select committee reviews into these problems but only acknowledged the need for action in their last few months in office. Last year we gave the pubcos one last chance to change their behaviour but it is clear the self-regulation approach was not enough. A change in the law is now needed. I hope these measures mean publicans are given a fairer chance at their running their pubs, which in turn will help them grow their businesses instead of losing them.”
A formal consultation process on the proposals will begin in the spring and is expected to last three months. Legislation is expected this year or in 2014. Greg Mulholland, chairman of the All–Parliamentary Save the Pub Group, said: “I am delighted that Vince Cable and the government have decided a statutory code of practice is needed that will at last enshrine in law that the tied licensee is not worse off than the free-of-tie licensee. This is great news for pubs, pubco publicans and their customers.”