BBPA defends pubcos after new study

BBPA: will look at recommendations

The British Beer & Pub Association (BBPA) has defended pubcos treatment of tenants after they were slammed in a report from the Institute of Public Policy Research (IPPR).

In its report, ‘Tied Down. The beer tie and its impact on Britain’s pubs’, the IPPR reported that 46% of tied pub tenants earn less than £15,000 per year, in contrast to only 22% of non-tied licensees.

The report also revealed that 32% of licensees have not received information on and read their pub company’s revised code of practice.

The BBPA has promised to look at the report and its recommendations. It said: “The recent survey we commissioned jointly with the Independent Pub Confederation shows that awareness of the new codes of practice is already very high among licensees, and rent is being clearly explained to tenants.

“These positive figures are even higher for new entrants, so we feel the industry is moving in the right direction. This survey also showed that 78% of new lessees and tenants under took pre-entry training before taking on a tied pub.”

“Since March 2008, we have seen a 35% increase in the tax on beer – this is a central reason why so many pubs are under pressure, as 50% of their wet sales are still beer. Pubs are also some of the most highly regulated businesses in Britain, and this is adding hugely to operating costs.”

The Association of Licensed Multiple Retailers strategic affairs director Kate Nicholls responded. She said: “If we are to have a healthy, thriving tied sector then we need to ensure that it works as a business proposition and that all sides earn a fair share of the profits arising from the business.

“Whilst the proportion of tied lessees earning less than £15,000 pa has fallen – down from 67% in 2008 to 46% today - it remains far too high.”

While Jonathan Mail, Campaign for Real Ale, head of public affairs, said: “This report highlights the crippling burden imposed on tied publicans by the very large pubcos in the form of excessive rents and inflated beer prices linked to long term commercial leases.

"The failure of the large pubcos to operate the beer tie in a fair and proportionate manner is pushing far too many tied publicans over the edge resulting in unnecessary pub closures. As a result local areas lose a valued hub of community life and pub goers suffer from reduced competition and choice.”

“In stark contrast to the large pubcos the family brewers have supported their tied publicans through tough times by sticking to fair traditional tenancy agreements and this is reflected in the very small number of family brewer pub closures.”