Enterprise defends pub lease code
Enterprise Inns has defended its redrafted lease code of practice against accusations that it makes it harder for hosts to secure rent cuts.
Enterprise revised its code in July and is to submit the new code to be assessed for clarity through the BIIBAS scheme in the autumn.
The old code includes a section on Enterprise's Equitable Rent Review (ERR), which says if licensees suffer financial difficulties and want a reduction, they should write to their regional manager "who will review your circumstances with you".
ERR isn't included in the revised code. Instead there's a section called Additional Retailer Protection (ARP), which says Enterprise "may revise your trading terms" following financial difficulty due to "material change in the local economy", such as a large factory closure or road diversion.
Worcestershire LVA chairman Mike Stevens said the new section is more restrictive because it specifies that changes must be due to local issues, not national ones like the recession or smoke ban.
The previous code said out-of-cycle rent cuts will be backdated from the date the licensee writes to their regional manager requesting a reduction. In the new version, adjustments will "be made effective from the date we conclude our review".
The ARP asks hosts to give "sufficient documentary accounting and stocktaking evidence for us to fully understand your business".
Stevens, who stressed he isn't against the beer tie, has raised concerns expressed by LVA members to Enterprise and the BII. He said: "Enterprise is trying to make it more difficult for licensees to get financial assistance in between rent reviews."
Enterprise Inns chief operating officer Simon Townsend flatly disputed claims that the new code is less generous.
"Our continuing discretionary support costs of £1.7m per month are clear confirmation of that.
"What we have done is clarify the wording of our code of practice to exactly match its application in practice, and added a new section relating to concessionary business support, which has never been previously specified in our code."
He said changes resulted from a "very few" instances "where the protections afforded by our code of practice were being abused by a number of individuals".
For example, those who took months to supply financial details, but still expected it to be backdated to the date of the original letter; and those who agreed new rent after a cyclical review then made a COP claim so they could get a backdated rent cut from that time.
Other examples include those who only applied strict financial controls after reviewing their circumstances, but still expected their claim to be backdated.
He said all Enterprise licensees in discussions about a code of practice review have been told of the changes in writing, and reviews were carried out "in exactly the same spirit and conditions with which they were already familiar".
Townsend said new statements will be added to the code of practice relating to the 13 commitments made by Enterprise following the BEC Report, before it is re-submitted to BIIBAS.
