Majority of publicans tied to big pubcos earn less than the minimum wage

According to a survey of 600 licensees by CGA Strategy on behalf of CAMRA (the Campaign for Real Ale), three in five licensees (60%) tied
to tenanted pub companies with more than 500 pubs earn less than £10,000 a year. By comparison, only 25% of free-of-tie licensees earn less than £10,000 a year.

On the basis of a 35-hour week (which CAMRA recognises is an underestimation of licensees’ average working hours), a £10,000 income would equate to £5.49 per hour. The current national minimum wage is £6.19 per hour, rising to £6.31 in October this year.

A recent survey by the PMA​ showed that 60% of licensees work at least 60 hours a week — that would equate to £3.21 per hour for a £10,000 income.
At the other end of the earnings scale, just one in a hundred tied pub licensees earn more than £45,000 a year, as opposed to one in five who run free-of-tie pubs.

Mike Benner, CAMRA’s chief executive said: “These new figures reveal the shocking truth that many licensees tied to the big pub companies are struggling to survive due to unfair business deals verging on outright exploitation. Invaluable community assets are being put at risk by pub companies forcing the majority of their licensees to survive on less than the minimum wage. The inability of licensees to earn sufficient income means money cannot be invested back into pubs.

“The Government should be congratulated for recognising the need to call time on the abuses of the big pub companies. Our message is that they must push forward plans for an independent adjudicator and code of practice without delay.

“The big pub companies are contributing to the destruction of Britain’s pubs by failing to support licensees with competitive wholesale beer prices and rents.

“Every pub failure is a disaster for the individuals in-volved, as well as for the local community built around
that pub. In contrast, pub companies can profit from pub failures by retaining licensees’ deposits, premiums and even selling the pub off to property developers.”

CAMRA’s survey asked licensees to select the level of personal income they earn from their pub from a range of earnings bands. The figures do not include any allowances for other benefits such as accommodation.

The research findings were made public as the Government’s consultation on its plans for a statutory code to regulate the pubco/tenant relationship entered its final few days.

They also come soon after Save the Pub Group chairman and MP Greg Mulholland called on Treasury ministers to investigate how much money in tax credits
is being paid to tied publicans, thereby “subsidising the pubco business model”.

Mulholland said that such income support would not be necessary if, as the Government intends, “the tied licensee is no worse off than the free-of-tie licensee”.