Mountford: Statutory regulation and why choice is not such a scary thing

Lo and behold an article from my old sparring partner Phil Dixon caught my eye. His piece amazed me.

Phil and I have a bit of history. I forced him to investigate Punch’s treatment of my family back in 2009 and, to be fair, he got to get the basics of the argument (though his attention was divided as there was a Test series going on, if I remember). Since then we have had a few good-natured bust ups and one memorable spat on the PMA forums which went on for so long even I got bored.

I described him to BIS officials just the other day as amiable and difficult to dislike. Even Barnsley’s 5-0 drubbing of Birmingham City and Phil’s subsequent gloating e-mail I met with a polite response.

However his case against the need for statutory regulation needs a response.

Firstly the government did not do a U-turn. Knowing the content of the e-mail sent from Jo Swinson’s office to the PMA​, the lurid headline “Jo Swinson washes her hands of the self-regulation deal” was far from accurate. Phil, obviously an avid reader of the Sun​ and the Sport​, took this as gospel.

Phil’s dismissal of Vince Cable’s cited “abuse of rental calculations” and his staunch defence of his baby PIRRS is quite amusing as I distinctly remember sitting behind a certain [licensee] Gary Mallen, who gave clear evidence to the BIS enquiry of 2011 and whose evidence of rental high jinks was that which Cable referred.

Personally I can say that I have yet to see a rental calculation by any pubco adhere to the RICS guidelines. I know of one example with a certain brewery not a million miles away from my home town, with which Phil was involved, whose rental calculation was so laughable, that after a half-hour meeting with yours truly, the rent was reduced from a proposed £45k to £29k.

As for PIRRS, well yes Phil – it does bring rents down, but if your rent is £50k and PIRRS brings it down to £40k is that really a success to be proud of when it should (according to RICS) be £20k?

As everything about PIRRS is confidential no one knows how the calculations are arrived at and no one has a right to appeal, so it’s hardly something that fills you with confidence. As the PIRRS board is made up of surveyors who frequently represent pubcos it hardly deserves the title of “independent”.

Multitude of sins​
Phil’s assessment of PICA-Service was another fantastic example of selective journalism at its best. He quoted licensee and PICA-Service pioneer Russell Stone very eloquently in his support of this system. (PICA-Service is, of course, chaired by Rodger Vickers, who, on the day it was announced he was taking the position of chairman was standing 10 feet away from me representing Punch Taverns in my rent review case).

What Phil didn’t quote was Russell’s point that “we must understand that this was the only ‘vehicle’ open to me in this situation”, and his further comment that: “It must be noted however that although my evidence is strong the pubco was only found to be in breach of its code in respect of the manner in which it conducted a rent review due in 2010 – the word ‘manner’ may cover a multitude of sins but is not specific enough in my opinion to help me understand the actual breach or indeed the pubco to learn from it.”

As for the second case, Alan York dedicated a five-page blog to his experience of PICA-Service and subsequent ‘victory’, but alas Phil chose to ignore his well-thought-out analysis, probably because he couldn’t find a single positive thing that Alan had to say about his beloved conciliation service.

And these people won their cases – God knows what those that fail to get a positive outcome would think!

Phil’s opinion regarding the proposed 500-pub de minimus​ was fun to read but really meaningless, as the consultation process is inviting a discussion on the matter. Cable’s letter to Adrian Bailey said he “considered” 500 was the correct figure to “consult on”. If you read Phil’s piece you would have thought it was a matter of fact.

However the really amusing stuff came at the end when Phil moved on to his assessment of that dreadful free-of-tie business.

He suggests that in a free-of-tie deal there “is no relationship except for the property chap telling the licensee what they need to spend”. Well Phil, in the tied sector there is no relationship except for the BDM who comes round to accuse you of buying out of tie, intimidate you into signing for F&F that they promised to give you for nothing and threatening to throw you and your family out of your home or watch as the bailiffs take all the money out of your wallet and till.

As for business support, well in a letter from [ex-Punch chief executive] Giles Thorley at the height of my dispute (which still has pride of place in my toilet), he criticised me for my “unreasonable expectations of Punch’s business support”. He detailed the A-board and wine glasses that my BDM had dropped off to me “in one instance out of normal hours” – Saturday morning, if I remember correctly (not normal hours in the pub sector?). Was this really worth 35% higher prices?

As for reductions in rents, I accept that in the tied sector rents are being reduced. It’s true that no longer will your rental figure put you out of business in three months. Nowadays it can keep you hanging on the breadline for years, whilst you slowly eat away at your life savings.

Upward-only rent clauses clearly exist in free of tie operations, I agree. But Phil, if this is such a considerable bugbear then use your considerable influence in the industry to challenge it, rather than as an excuse to justify a system that has been used to “exploit and squeeze licensees” (Cable’s words, not mine).

This is about choice Phil – the joy of retailing, the option to buy your products, choose your agreement and have the chance to say: “You know I quite fancy the advantages of this tied pub deal with Mr Honest John pubco,” or to say: “I quite like being able to go with Mr Whiter than White pubco and just having their tied beers.”

Choice Phil – it’s not such a scary thing.

If the tied model offers so many opportunities and advantages there should be no fear from any brewer or pub owning company from offering an alternative – is that so controversial?

Dave Mountford is a licensee and GMB union branch secretary​