I want to break free

If the nation's pubcos had followed the recommendations of the Trade & Industry Select Committee's (TISC) findings four years ago, they might not be in the sort of mess they're now in and in turn lessees might be operating in a better environment. So believes the Fair Pint campaign's co-founder, accountant Brian Jacobs. The Fair Pint campaign itself might never have been born.

While the smoking ban, rising costs and the credit crunch have played their part in hurting pubs, Fair Pint was a direct consequence of what Jacobs and his Fair Pint co-founder and licensee Mike Bell believe to be the pubcos' strategy of subverting the TISC's original proposals.

"True, the TISC didn't recommend the removal of the beer tie four years ago, but it argued for profit assessment, adherence to national accounting standards, breakdown of rent calculations, removal of upward-only rent reviews and the AWP tie," he says. "Pubcos will say they have followed these recommendations but they did everything they could

to subvert the TISC's proposals. Four years later, what the hell is going on?"

Born out of the same principles as the Freedom for Pubs movement, another Jacobs co-creation, Fair Pint must succeed in its aims or some 15,000 pubs could close in the next few years, he believes.

"Many licensees are hanging on by their fingernails," he says.

"We have to break the 'Gordian knot' that is the beer tie, which together with RPI-linked rent reviews is directly responsible for the deaths of thousands of pubs."

As well as a realistic rental system and freedom to buy beer from wherever a pub chooses, Jacobs and his colleagues want to see the valuation of pubs put onto a more realistic footing. "Profitability determines rent and asset values," he says. "A property's value should not determine the rent charged. There is a clear imbalance of understanding here, with the City and venture capitalists missing the point about a pub being a building with a single use."

And if the review of the TISC's findings, expected to take place in November, comes to naught? Or merely plonks the case before the Competition Commission, which will take several years to reach a conclusion? "We'll bypass the UK Parliament and take our case to the European Commission (EC), where we feel we'll get a more sympathetic hearing. The EC will put pressure on the UK government to act," says Jacobs.

The irony of Brussels coming to the aid of beleaguered licensees is not lost on him. "We are in this to win," he says. "If we lose, 60 per cent of the country's 25,000 tenants are at serious risk. That's worth fighting for."

The view from the City

The Fair Pint campaigners relish the prospect of the beer tie being removed, since they believe that struggling licensees would subsequently have a fairer crack of the whip.

But with the tie so closely linked to the fortunes of the leased and tenanted model of a number of stock market-listed pub operators,

it is fair to say City types look upon the prospect of its being undone with rather less enthusiasm.

"It is a natural reaction to blame other people when times are tough," said one. "But nobody forces anyone to take on a pub. Through the tie the rent charged is flexible - around 40 per cent of the overall total. Get rid of the tie and that flexibility will go. You will pay an open market rent and your fixed costs will double. Plus, do away with the tie and your landlord won't invest a penny in the property.

"True, you can buy from anywhere you like, but buying on an individual pub basis will mean you will only get discounts on one or two best-selling products. And in addition you will be even more vulnerable to shifts in beer volumes."

And when pubcos do roll out leases where lessees can pay fixed rent and opt out of the tie? "The take-up when Enterprise Inns did this a few years ago was only 15 per cent," says one analyst, adding: "Why should operators subsidise someone who can't run a pub properly?"

What's the point of Fair Pint?

The group's main aim is to see the tie removed from all leased pubs - except those tied to brewers who own up to 500 pubs. They believe this will enable licensees to compete in a fair market and save pubs at risk of closure.

So far members have claimed success because their call to have the 2004 Trade and Industry Select Committee report on pub ownership reviewed has been met.

They also want supporters to back Tim Farron MP's early day motion which calls for the tie and rent formulation to be referred to the Competition Commission to address the dominance of the pubcos. So far 56 MPs have backed the motion.

As well as having MPs including Tim Farron and Sir Nicholas Winterton on side, the group has received financial support from Mean Fiddler impresario Vince Power.

The Fair Pint steering group is formed of Brian Jacobs, licensees Mike Bell, Steve Corbett and Mark Dodds, and chartered surveyor David Morgan.