FLVA calls for fairer share of profits for tied licensees

Federation of Licensed Victuallers Associations (FLVA) president Nigel Williams said too many tenants’ earnings hovered between the minimum wage and national average.

Brewers and pubcos have helped themselves to good returns on investment and a much larger proportion of total income created by the tenant-landlord partnership, Williams told delegates at the FLVA’s annual conference in Harrogate.

He said: “The FLVA remains constant in its support of the tied tenancy model in principle, but is adamant the shape and balance of the share of profits that a well-run pub creates has to be more fair.

“If a tenant is given a fair chance to get a return on their investment, time, money and effort, we are more likely to be able to retain existing good tenants and attract more people with good skill-sets to run our pubs and grow our industry through well-run, well-maintained and competitively-priced pubs.”

Williams asked how it could be fair that a tenant and his wife worked at least a 40-hour week when they were rewarded with pre-tax joint earnings of £30,000.

He claimed this figure compared with the equal £30,000 share most brewers and pubcos would receive in rent, together with the wholesale profit they would then earn from the drinks supply.

“This could easily bring the pubco /brewer earnings of up to £120,000 per year. Many would view this as an unbalanced partnership,” he said.

Williams added that the FLVA and others had been frustrated by the Business Innovation & Skills Committee inquiry into the pubco-tenant relationship and its aftermath.

He said: “We felt the inquiry process did not give us a real opportunity to give a tenants’ representative view of the issues affecting our industry.”

The FLVA will work with other trade bodies to create a substantial, legally binding industry code of practice and a set of governance bodies to form a better way for the tenanted pub industry to develop.