BBPA defends pubcos to MPs

MPs: received letter from BBPA

The British Beer & Pub Association (BBPA) has written to every MP to refute claims from the Business, Innovation & Skills Committee (BISC) that the beer tie is causing pubs to close.

BISC’s damning report, released last month, concluded that most of the steps put in place to reform the pubco/tenant relationship have not worked. It called for an independent adjudicator to monitor pubco codes of conduct.

In the letter to MPs, BBPA chief executive Brigid Simmonds said BISC “failed to appreciate the meaningful reforms undertaken by the wider industry since 2010 and the difficult conditions in which we operate”.

“The smoking ban, economic recession and the 35% increase in beer taxation which the industry has endured since March 2008 are the main causes of pubs closing – factors which have affected all pubs.

"However, since 2008 data demonstrates that a lower number of tied pubs have closed when compared with their independent equivalents - with pub rents falling by 20% on average in response to the economic downturn.

“The Select Committee has failed to consider these lower tied pub closure rates, which are in part the result of the £265m invested by pub companies in the last year alone to support their pubs during testing times.

“They have also ignored the vital role the tie plays in the business model of Britain’s regional and family brewers, unlike the 2009 report which made clear they ‘would not wish to damage regional brewers’.”

The letter outlined steps taken by the trade since BISC’s 2010 report.

This includes all but three codes of practice having been independently accredited, the arrival of new training schemes for incoming tenants and business development managers, the low-cost rent arbitration scheme, a new business advice service, and a list of benchmarking costs for pubs being published on the BBPA’s website.

The letter warns: “To legislate now for a statutory code and a bureaucratic adjudicator would pile more costs onto pubs and lead to more closures — something we hope ministers will consider carefully when they respond to the Committee’s recommendations and Martin Horwood’s Private Member’s Bill [calling for a statutory code of practice to be introduced forcing pubcos of more than 500 sites to give tenants a free-of-tie option and an open-market rent review].

“The sector needs less tax and less regulation, not more, if it is to continue to create jobs and sustain much needed economic growth in our communities.”

The Government is expected to respond to BISC’s recommendations by the end of November.