More pressure on pubco leases

The Government's scrapping of regulations on commercial land agreements means pubcos will now have to demonstrate that tied leases are not anti competitive, says anti-beer tie campaign group Fair Pint.

The Government has decided to revoke the Land Agreements Exclusion and Revocation Order from April 2011 — the Order currently affords land agreements, such as pubco beer ties, protection from anti-competitive legislation.

Meanwhile the Campaign for Real Ale (CAMRA) vowed to continue lobbying to have restrictive covenants — used to prevent pubs being traded as pubs in the future — outlawed, after the Government declined to act.

Steve Corbett from Fair Pint said: "The Government's decision to revoke the order is a small bit of good news for the pub sector.

"On its own the effects of the removal of this order will be small, but it does lift a significant barrier to future regulatory intervention in the sector.

"The removal of the order will mean that pub owning companies will have a duty to ensure that their agreements aren't anti-competitive and to go through a process of providing a self-assessment about the impact of their lease agreements on competition in the sector and to ensure that they not in breach of competition law."

Nick Bish, Association of Licensed Multiple Retailers chief executive, said: "This move will require companies require companies to scrutinise themselves on an annual basis and to self-assess whether or not they comply with competition law.

"This is a victory for common sense and fairness which will further clarify relationships between all parties in a lease."

He added: "We should not overstate the importance of this development and we still look forward to the industry code on rents and lease agreements but it is a sensible and pragmatic step forward which the Association lobbied for and now applauds."

Mike Benner, CAMRA chief executive, said: "This is very positive news for pub-goers, small brewers and struggling lessees. The Order is an anomaly which has for too long given legal cover to companies which are party to potentially anti-competitive agreements.

"The large pub owning companies will now have to review their existing beer tie arrangements in the full knowledge that they will be liable to severe penalties if it is subsequently proven that they have breached Competition Law."

Restrictive covenants​

However, despite lobbying by CAMRA and Fair Pint, Government said the practice of using restrictive covenants was not covered by the Order.

CAMRA national spokesman Iain Loe added: "We are still pushing to see the removal of restrictive covenants and their use by pubcos to restrict competition. We know some companies have said they would stop selling properties with covenants attached, but we would like to see them outlawed."