BBPA: RICS report will resolve misunderstandings
The RICS report will go a long way to resolving misunderstandings and misconceptions, the British Beer & Pub Association has said.
Martin Rawlings, BBPA's director of pubs and leisure, welcomed the report's conclusions and said: "The report confirms the view that the Fair Maintainable Trade (FMT) is the most reliable method available and we agree with and welcome that conclusion.
"The BBPA very much welcomes the RCIS report which will go a long way to resolving some long-standing misunderstandings and misconceptions."
"The recent Brooker case confirmed that view and contrary to other interpretations it did not set a benchmark on how the divisible balance should be apportioned.
"The 35% was applied to that particular case where it was deemed appropriate. RICS does not and never has endorsed any particular split of the divisible balance and that is right.
"The division has to depend on the nature of the particular pub and the details of the deal that is struck, which again is dependent on the degree and extent of the purchase obligations incurred."
Rawlings added that much of the RICS report's recommendations echoed the recent agreement between the BBPA, BII and Federation of Licensed Victuallers.
He pointed out that the new alliance supports independant benchmarking of costs, and also agreed with RICS view that the Association of Licensed Multiple Retailers (ALMR) figures, "are limited in their value".
For this reason Rawlings said the revised BBPA code would call for all "all such figures that are available are made known to those wishing to take on a pub".
"It is clear that we need to talk to RCIS in respect of their proposal to draw up a code on rent reviews and lease renewals." Rawlings reasoned that this was already "largely covered in the agreement to revise the industry code" and that the new Rent Review Service would provide a provide a low cost resolution.
He also welcomed the news on the register of rents - "it is not a realistic proposition and we are pleased RICS agree on this point".
In relation to RICS statement that a correct interpretation of its guidance means a tied tenant is no worse off than their free of tie equivalent, he said: "We look to the guidance to take into account all the factors that make such an assessment, which include the benefits that accrue from the tie including such factors as risk, support, capital investment and so forth that makes such a comparison feasible."
In conclusion he added that the alliance recognises as important the independent nature of the RICS guidance and "will abide by the provisions of that guidance".
