MP calls for more focus to kerb puco abuse of licensees

to curb pubco 'abuse'

by John Harrington

Labour MP Michael Wills has told fellow MPs in the House of Commons that Government scrutiny of the pubcos must continue to prevent abuse of their 'dominant contractual position' over licensees.

Wills, who secured a House of Commons debate on the plight of rural pubs last week, said: 'The pubcos frequently claim that their business model depends on their tenants prospering and the argument is that it would not be in their interest to bleed tenants dry.

'However, there is a difference between the extreme position of bleeding them dry and simply exploiting them by charging unreasonably high prices for the tied beer, secure in the knowledge that their tenants will often be working extremely long hours to make the business pay, and swallow any disproportionate increases in costs.'

Wills said some pubcos are exploiting their 'strong position' to include 'worrying' clauses in their contracts that put licensees at a disadvantage.

The MP claimed there is 'nothing' in the new BBPA (British Beer & Pub Association) code of conduct, which follows last year's Trade & Industry Select Committee inquiry into pubco power, to prevent 'exploitation' of licensees by the pubcos.

Wills insisted that pubcos have the freedom to raise beer prices as 'often as they want and as high as they want'. He said: 'It is a seller's market and the pubcos hold most of the cards.'

The pubcos' freedom to charge what they want leaves them 'in a position where they can use their dominant economic position to exploit their tenants'.

Wills called for the Department for Environment, Food and Rural Affairs and the Department of Trade and Industry to 'continue to monitor the situation'.

Minister for rural affairs Jim Knight said he would monitor the relationship, but will examine 'the problems of exploitation to which [Wills] referred in the working hours of publicans and the transparency of rents'.