CAMRA criticises use of covenants

The Campaign for Real Ale (CAMRA) has written to community pubs minister Bob Neill expressing concern that 11 tenanted pubcos haven't ruled out applying restrictive covenants to pub sales.

Neill is overseeing a consultation on plans to ban or restrict the use of covenants, which force change of use when pubs are sold, this summer. Enterprise, Punch and other major pubcos have promised not to use restrictive covenants, which the Business & Enterprise Committee said should be banned in its 2009 pubco report.

CAMRA told Neill that 11 tenanted operators, which run around 4,000 pubs between them, have declined to rule out using covenants in their new codes of practice. It suggests the issue of covenants will become more high profile than expected when the consultation begins.

Intention to restrict​

In their codes, several operators argue that forcing change of use at one pub will help other local pubs survive. But CAMRA said: "This shows a clear intention to restrict competition and a cynical attempt to boost profits for their remaining pubs in the area, to the detriment of consumers and the community."

Matt Kearsey, director of Hall & Woodhouse's tenanted pub division Badger Pubs, played down the use of covenants, saying the company would sell fewer than one pub per year on average with the clause.

But JW Lees boss William Lees-Jones, a staunch supporter of restrictive covenants, said: "Assuming that people believe in the free market rather than Stalinism, the free market should dictate [if a business changes use].

"You have to adopt a use-it-or-lose-it mentality."

A spokesman for Scottish & Newcastle Pub Company — the largest operator not to rule out applying covenants — said: "We don't have any policy to use them. The reason we don't rule them out is there could be a situation down the road where it could be for the good of the community to use them."

Where major operators stand​

Pubcos' policies on restrictive covenants:​ Won't use them: Punch, Enterprise, Marston's, Greene King, Fuller's, Charles Wells, Brakspear

Won't rule them out: ​S&NPC, Thwaites, Shepherd Neame, Brains, Wadworth, Hall & Woodhouse, Young's, JW Lees, McMullen, Batemans, Timothy Taylor

Not yet specified:​ Admiral Taverns, Robinsons