In the wake of mediation: what happens next?
BBPA promises "fundamental reforms"
According to the British Beer & Pub Association (BBPA) licensees are set to benefit from "fundamental reforms" after reaching an agreement with the BII and Federation of Licensed Victuallers Associations.
Chief executive Brigid Simmonds said the commitments made should ensure that government or Office of Fair Trading intervention into the industry is now unnecessary.
The agreement focuses largely on revising the BBPA's code of practice which members will have to incorporate into their own codes of practice - and seek BII accreditation - by June 30, 2010.
What the BBPA's code includes:
• Pubcos must establish standards of competence for business development managers and setting out a procedure to deal with complaints and resolve disputes
• describe the various rental and purchase obligations offered by the company
• show transparency with regard to prices charged for beer, eligibility for discounts and whether they will allow guest beers supplied outside the tie
• make clear the pub company's policy in respect of rent setting and review including full transparency in regard to how the Fair Maintainable Trade (FMT) has been calculated
• ensure upward-only rent review clauses are not included in new leases and offer existing lessees the opportunity to convert to new leases
• remove AWP machine income from the divisible balance and make clear how machine income is considered
• set out a clear policy for the operation of flow monitoring equipment in accordance with minimum standards be set out in the BBPA Code
The agreement also requires lessees to undertake pre-entry training, produce a business plan and take qualified professional advice prior to taking on a lease.
Along with other trade bodies the BBPA has helped set up an Independent Pub Rent Review Scheme (PIRRS), which it will fund, that will offer lessees a low-cost alternative to arbitration in rent review disputes.
A "strong and unified voice for licensees"
The new umbrella group - the Independent Pub Confederation - that has emerged from the ashes of mediation claims to be in a position to represent "lessees, consumers, licensees and small brewers".
Members include the Association of Licensed Multiple Retailers (ALMR), BII, CAMRA, Fair Pint, Federation of Small Business, Guild of Master Victuallers, Justice for Licensees, Unite the Union, SIBA and the Federation of Licensed Victuallers Associations.
It aims to present a common voice on lobbying MPs and other stakeholders and has already produced a collective response the Business and Enterprise Select Committee report that was highly critical of the pubco model earlier this year.
Nick Bish, chief executive of the ALMR, which will co-ordinate the group, said: "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."
The IPC's manifesto sets out the points it believes are needed to address all the issues raised in the BEC report.
Manifesto
Rental valuation model - RICS 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
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 e.g. pricing policy, handling of discounts. All codes of practice to be made legally binding and not to be altered unilaterally.
The beer tie - all lessees should be offered a choice of being tied or free. 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.
AWP tie - to be removed from all long leases
