More intervention on pubco-tenant relations due?

The failure of the industry to react to the recommendations of the Trade and Industry Select Committee (TISC) could leave it facing government intervention, says a leading lawyer.

Rupert Croft, of competition lawyers Maitland Walker, has slammed the British Beer & Pub Association (BBPA) and its code of practice on the relations between tenants and pubcos as being a "not a greatly impressive" document.

Speaking at a conference in London last week, the lawyer who is representing Bernie Crehan in his case against Inntrepreneur, said the code which was reviewed at the end of last year simply "rehashes" the previous code which was deemed to be unsatisfactory by the TISC.

"The BBPA's code of practice prepared in response to the 2004 TISC report does not appear to comply fully with the TISC's recommendations and as a result, a further recommendation by TISC for a legally binding industry-wide code of practice cannot be ruled out," he said.

However, he indicated that the beer tie in its present form was safe for the forseeable future, although pubcos are not immune from potential claims under the Competition Act. However, the BBPA has refuted the claims. Mark Hastings, communications director at BBPA, said: "The code is significantly different and has made significant steps to tighten procedures.

"We have considered everyone of the select committee recommendations and made changes where we think changes need to be made."

He also denied that the code was changed without consultation with interested parties. "Consultation was made with pubcos and licensees. A number of groups were consulted," he added.

Concerns raised by Rupert Croft:

• The BBPA is not an industry-wide code of practice which the TISC appear to have been intending
• The BBPA code has been produced urgently as required by TISC
• There was not "consultation with the widest range of interested parties including tenants, their representatives and public house owners, as required by the TISC.
• The BBPA code does not state it should be a condition of acceptance by pubcos by tenants have obtained all necessary professional advice
• Not require pubcos to five a breakdown of how rents are calculated to their tenants
• No reference is made to national guidance on rents
• The provisions regarding arbitration does not specify there should be no imposition of legal costs on either side
• No explanation on the role BDMs
• There is no provision regarding the higher level of sales support and technical services which TISC required
• TISC recommended the removal of AWP machine tie which is not mentioned
• No reference to the disclosure by pubcos to tenants of beer discounts