Pub trade back at loggerheads
The pub trade is back at loggerheads this afternoon after last-ditch mediation talks failed late last night.
The landmark mediation process to broker an agreement between the warring factions of the pubcos and the tenants ground to a halt.
However, both sides are attempting to claim victory from the process. The British Beer and Pub Association (BBPA) has claimied a "binding agreement" for "fundamental reform" has been struck with the BII and the Federation of Licensed Victuallers Associations, which will make Government intervention unnecessary (Pubcos set out 'fundamental reform' plans).
But crucially, the key tenant and consumer groups involved — Fair Pint, Association of Licensed Multiple Retailers, the Campaign for Real Ale (Camra) and Justice for Licensees — have not signed up to the BBPA initiative and have instead formed a new group with a new charter for reform.
The Independent Pub Confederation (IPC) also includes the BII, Federation of Small Businesses, Guild of Master Victuallers, Unite and the Society of Independent Brewers (SIBA).
The new group is seen as "history in the making" by campaign group Fair Pint, which is seeking the removal of the beer tie.
The IPC is calling for:
• Beer tie: All lessees to be offered the choice of going free of tie on beer supply. If beer is to be tied, all other product ties should be severely restricted. Lessees to be offered a guest beer sourced direct from a small brewer. Any landlord below a threshold of 1% of the pub market to be exempt from these requirements.
• Rent valuation: The Royal Institute of Chartered Surveyors to set up independent working group comprising landlord and lessee representatives to formulate new valuation guidelines. This should establish the principle that the tied tenant should be no financially worse off than a tenant who is free of tie and the model should make allowances for recompense for the tenant's time spent in the day-to-day running of the business. Tenants goodwill should be properly disregarded.
• Rent setting: There should be industry agreed minimum standards of disclosure, transparency and fairness in the handling of rent negotiations.
• Issuing of leases: Individual pub companies should establish representative lessee forums to discuss material issues of concern eg pricing policy, handling of discounts. RPI-linked and Upwards Only Rent Review clauses should be removed by deed of variation. The costs of insuring for loss of income from wet rent should be borne by the landlord not the lessee. All codes of practice to be made legally binding and not to be altered unilaterally.
• AWP Tie: To be removed from all long leases.
Democratic deficit
"We were very disappointed that the recent mediation talks broke up without reaching full agreement, but the creation of this strong and unified voice for publicans and consumers is an extremely positive step forward and should address the democratic deficit in the current political debate," said ALMR chief executive Nick Bish.
"The concerns of ordinary licensees are seldom heard loudly and clearly enough because we have multiple messages and multiple messengers. The creation of the IPC gives us one single, unified voice which cannot be ignored."
The IPC's manifesto has been sent to Business and Enterprise Committee chairman Peter Luff, business secretary Lord Mandelson and the Office of Fair Trading.
"We welcomed the opportunity to participate in the mediation process and had hoped it would result in agreement industry wide," said Clive Davenport of the FSB.
"We are frustrated by the outcome. Our fight for change will continue and our collective voice has been significantly strengthened by this process."
Inez Ward of Justice for Licensees, said: "We are extremely disappointed that the golden opportunity of mediation did not reach fruition. That said, the formation of the IPC is a hugely positive step forward which, we feel, will only benefit this trade."
• Pubcos set out 'fundamental reform' plans.
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