How worried should pubcos be?

So here we are again. Four years on from the Trade and Industry Select Committee (TISC) inquiry into pubco power, the big guns of the trade are facing fresh scrutiny from the corridors of power.

Eleven MPs from across the political divide will examine whether pubcos have made good on the promises from the last inquiry into how they operate.

In one corner we have the major pubcos, battling to defend the established model for the beer tie and rents. In the other corner we have the likes of campaign group Fair Pint, helped by their anti-pubco MP friends.

But how significant is this review? Mark Brumby, a City analyst at Blue Oar Securities, believes it is, without doubt, a "big deal".

"The least this is, is a monumental distraction at a time when the pub companies, particularly Punch and Enterprise, could least do with it," he said.

Brumby is clear on why pubcos will be feeling more than a little uneasy in the lead-up to the review.

He pointed to "tub-thumping" politicians, who he expects will be criticising the practices of the large operators. "The little-man, the tenant, and his friends have votes, the pub companies do not," he added.

The one other significant point for Brumby is that the economic and political climate has changed vastly since the last inquiry.

"In 2004, the pubcos lobbied well and (virtually) nothing happened," he said.

"Closed pubs are now big news."

Anti-pubco MP Timothy Farron, who is involved with Fair Pint, said he hoped the Business and Enterprise Committee, conducting the review, would feel "slighted" because pubcos had "effectively ignored the recommendations of the TISC inquiry".

This included the British Beer & Pub Association's (BBPA) code of practice being updated to cover rent reviews, the role of business development managers, complaints procedures and the taking of legal advice by prospective tenants.

Farron said: "Given many (MPs) are the same as the original select committee, they will be especially appalled by the flagrant disregard of many of the issues."

He added he would like to see an end to the beer tie and a restriction on the number of pubs that companies can own ­ somewhere in the region of 500.

The MP's sentiments are echoed by Fair Pint supporter and licensee Mark Dodds.

He claimed the pubcos would "find it difficult to assert that they have followed the recommendations in the 2004 review".

However the pubcos and the BBPA, which represents them, seem prepared for the fight. Punch Taverns described the review as "disappointing", but a statement added: "This will give us the opportunity to demonstrate how Punch has positively acted on the recommendations of the original committee report and will reinforce our commitment to safeguarding the future of the great British pub."

And Ted Tuppen, chief executive of Enterprise Inns, stressed that it was a review of the TISC inquiry and not a new investigation.

The BBPA described it as a "positive opportunity to get the message across about the actions we have taken".

Either way, there are interesting times ahead for the industry.

Pubcos are under pressure already with the state of the industry ­ so an examination of how they operate will be the last thing they need.

And with the committee expected to report before Christmas, unhappy tenants and lessees may just get a bit of welcome festive cheer.

• For information on how to submit evidence visit www.parliament.uk/ parliamentary_committees/ witness.cfm

The man in the chair

Peter Luff is a name set to become familiar to many in the pub trade.

The Mid-Worcestershire Tory MP will chair the Business and Enterprise Committee, reviewing the 2004 Trade and Industry Select Committee inquiry into pubco power.

As a keen scuba diver, Luff must be used to examining things close-up ­ and he will need all his observational powers during this investigation.

Though Fair Pint is taking the credit for the review being launched, when asked, Luff made no direct mention of the group.

Asked why now for the review, he replied: "Why not now? The original committee said it would revisit the subject and that is what we are doing.

"There has been concern among some of my parliamentary colleagues and people both in and outside the industry about the pubco system and we will be inviting people to submit their thoughts to us."

Key questions

What the committee will be asking...

• Has the Licensing Act 2003 had an effect on competition within the market?
• To what extent have revisions to the framework codes of practice met the committee¹s concerns?
• To what extent are the codes applied by the pubcos?
• Is there a need for further regulation of the industry?