FDBusiness.com

Pubs struggling to pay rent or beer prices could save thousands of pounds a year each, thanks to a new Code of Practice and the backing of a powerful Adjudicator, under proposals announced by the British Government.

The Government want to make sure that pub tenants are treated fairly by pub companies and hope that the new proposals will save tenants £100 million per year. The Code would contain mandatory rules for all pub companies who own a certain number of pubs. In particular it would stop pub companies abusing the beer tie, which obliges tenants to sell certain types of beers often at high prices.

Under the proposals a new Adjudicator would have the power to:

* enforce the Code

* investigate any breaches, and

* deal with disputes through possible sanctions and fines.

There are approx 50,000 pubs in the UK and 48% of pubs are tied (as of September 2012).

The Code will apply to those pubs which own over 500 pubs, to focus on the part of the industry where almost 90 per cent of complaints are received. The consultation seeks views on whether this is a fair threshold.

If the proposed threshold for the Code remains the same, pub companies that have 500 or more pubs that will fall under the Code would be: Enterprise Inns; Punch Taverns; Greene King; Admiral; Star; Marston’s; Wellington; Trust Inns and Spirit.

“We gave pub companies every chance to get their house in order. But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn’t working,” says Business Secretary Vince Cable. “Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship.”

He continues: “The new proposals could also allow tied pubs to have independently picked guest beers and help the growth of small beer and ale manufacturers across the UK. The Government is committed to building a thriving pub sector. The industry represents many small businesses, employing hundreds of thousands of people across the country.”

Under proposals the Code will make sure that:

* pubs are fairly and lawfully treated by pub companies

* tied pubs are no worse off than free-of-tie pubs

* pub companies charge fair rents and beer prices, with the possibility of open market rent reviews

* tied pubs could have the option of a guest beer, picked independently, which could help the growth of small beer and ale manufacturers in the community.

If pubs feel that they are being treated unfairly or there has been a breach of the Code, they will be able to complain to the Adjudicator who can investigate and arbitrate the dispute for them.