Statutory code: Enterprise Inns chief executive Ted Tuppen defends leased sector
Speaking to the Financial Times, Ted Tuppen, chief executive at Enterprise Inns, criticised the Government proposals launched yesterday.
The Government unveiled plans for a statutory code and adjudicator for the pubco/tenant relationship which it said would save tenants £100m per year, and ensure tied pubs are "no worse off than free-of-tie pubs".
Tuppen said to the FT: “Leased and tenanted pubs are surviving because of the support of the pub companies. Why would I want my good pubs to shut? It makes no sense.”
Enterprise earns about £9,000 less per pub a year than it used to because of cuts it has made to rents and beer prices, he added.
Punch executive chairman Stephen Billingham writing in the Telegraph defended the beer tie.
He wrote: “The ‘beer tie’ is at the heart of objections to the sector. Put simply, the tie is a promise by the tenant to buy beer through a pub company so the company can benefit from bulk purchasing. In turn, we give them the chance to set up a new business with no capital investment and a lower market rent. Without us, a new pub operator would find it almost impossible to set up a new business, given the difficulty of borrowing from the banks. Landlords also benefit from our advice and support.
“At Punch, we have a balanced relationship with our tenants: we give them an option of buying beer at market prices but without a subsidised rent; tenants no longer face upward-only rent reviews. There has been a marked decline in complaints; the performance of our pubs is stabilising and, in many cases, improving. Vince Cable’s proposals would create a state-backed quango with the power to interfere with long-standing contracts."
He said he is concerned that Vince Cable has made up his mind to abolish the tie and said he cannot understand why the business secretary is keen to expose pubs to "this tough environment".
“For the sake of the great British pub, we hope more sober heads will prevail,” he said.
