Beer Background

'Landmark' defeat for giant pubcos

Added: Tuesday, November 18th 2014

In a major blow to giant pub companies, MPs voted today to include a “market rent only” option for tied pubco tenants, defeating a government attempt to block an amendment to the Small Business, Enterprise and Employment Bill. After a long and passionate debate, 284 MPs voted for an amendment moved by Greg Mulholland (pictured second left with celebrating pub landlords), LibDem MP for Leeds North West and chairman of the Parliamentary Save the Pubs Group. 269 MPs backed the government.

The new Clause 2 states that companies with more than 500 pubs must offer a market rent only (MRO) option, which will be added to the Bill. It means that tenants who opt for an MRO will be free to buy beer free of the pubco’s tie.

During the final reading of the Bill, Employment Minister Jo Swinson proposed a new Government amendment that said a review would be held two years after the Bill becomes law to determine if an MRO option should be included in the code. She added that an MRO would only be implemented if the review finds that tenants are not sufficiently protected by the system. Ms Swinson appeared at the Government despatch box in place of Secretary of State Vince Cable, who was absent from the debate.

But the last-minute Government amendment failed to persuade opponents of the giant pubcos, who came in for repeated verbal bashings during the debate, as did their mouthpiece, the British Beer & Pub Association, which was castigated by Greg Mulholland.

The new clause says an MRO would “come in gradually only at certain trigger points”, including lease/tenancy renewals, rent reviews, change of terms or change of owing company. It adds that large pubcos that also brew beer will be able to insist on their brands being sold in their tenanted and leased pubs, but the tenant would be free to buy beer from anywhere.

The amendment adds that the MRO option would involve a 21-day period of negotiation followed by a 90-day period of assessment undertaken by an independent expert agreed by the two parties. Following this date, the tenant has the right to pay the assessed MRO and can choose where to buy his or her beer.

*CAMRA, the Campaign for Real Ale, called the vote a “landmark victory for beer drinkers, pub goers and licensees.”

Chief executive Tim Page says: “Today’s parliamentary vote helps secure the future of pubs. CAMRA is delighted that, after 10 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.”

Tim Page adds: “Allowing more than 13,000 pub tenants tied to large pub companies the option of buying beer on the open market at competitive prices will 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.”

CAMRA’s chief executive thanked 8,000 members of the campaign who petitioned their MPs to vote for the amendment.