Speaking at the Tenanted Pub Company Summit yesterday (17 June), organised by the PMA and M&C Report, Tuppen suggested there is more that the industry could do and supported having close scrutiny of the industry’s framework code.
He also said he’d be prepared to extend Enterprise’s ‘cooling off’ period for new tenants from six to 12 months.
But Tuppen stressed: “In my opinion, the consultation document is a disgrace. Biased and almost completely lacking in genuine evidence, it espouses as truth the opinions of a small but obsessive group who have been campaigning against the pub companies for almost a decade.
“Fair Pint, IPC [Independent Pub Confederation] – they’re all the same people, including a high proportion of failed or failing publicans looking for someone to blame, or self-serving campaigners looking to make a turn.”
Tuppen asked: “Are we going to let a small group of campaigners and a handful of MPs bugger up our great industry?”
The Enterprise chief executive labelled the online survey as part of the consultation “ludicrous”.
And he said the principle supported in consultation that a tied tenant should be no worse off than their free-of-tie counterpart is “a fabricated concept, completely impractical, unworkable and having no basis in RICS guidance or law”.
Unintended consequences
Tuppen listed five “unintended consequences” of the statutory code:
- A material increase in the rate of pub closures, particularly smaller pubs and pubs in rural locations
- Closing off the industry to newcomers
- A “huge reduction” in the level of investment into pubs
- Reduced consumer choice, the closure of cask ale breweries and the dominance of international lager brewers
- Brewery closures, job losses, “and of course a massive tax hit to the Treasury”.
Tuppen said the Government “completely missed the point about struggling tenants”. He pointed out that Enterprise has 117 pubs run by c.30 Association of Licensed Multiple Retailers member companies, paying average rent of £50,000 and, he believes, making profits of a similar amount.
“They are not struggling tenants and we estimate that the formulae set out in the consultation will up their profits by about £10,000 per pub, a transfer of value of to the ALMR member pubs in our estate of £1.2m.
“The extra profit would probably add around £5m to the capital value of their leases on assignment.”
Self-serving agenda
Tuppen addressed recent CGA data released by the Campaign for Real Ale that said many tied publicans earn below the minimum wage. “I have no doubt about the integrity of CGA, but the question they were asked to put to tenants, ‘how much do you earn’ is hardly specific.”
He pointed to another question from the survey that was not highlighted by the group. When asked if their business is struggling financially, 53% of tied tenants agreed, compared to 52% among free-of-tie respondents.
“So does all of this campaigning really reflect genuine desire for rational, credible and necessary change or does it represent a disingenuous, self-serving agenda from a handful of people who definitely should and almost certainly do know a lot better?”
He also hit out at the “deliberate distortion of the meaning of evidence” in the process of Select Committees looking at the issue and also the consultation.
“I know MPs are busy but they have a responsibility to work out the difference between real evidence and hearsay, bias and prejudice. We do not yet convict someone in this country on the basis that ‘someone who didn’t like them very much thought they were bound to have done it’.”
Awareness campaign
Tuppen said self-regulation “is working”, saying PIRRS [Pub Independent Rent Review Scheme] and PICAS [Pub Independent Conciliation & Advisory Service] are “well understood and accepted”.
Three cases have so far been referred to PICAS, with Enterprise winning one and losing two. “This is not a voluntary code in crisis. It is a voluntary code that is taken very seriously and is working.”
Tuppen suggested that the industry supports a Government-sponsored awareness campaign so everyone knows about the framework code, as well as PICAS and PIRRS. He called for a “truly independent body, perhaps led by a retired judge or similar”, to review the framework code, mirroring the way Enterprise’s codes are re-accredited every three years.
Tuppen said: “If there is genuine concern about publicans getting into something they don’t really understand, we would be happy to extend our cooling offer period from six months to 12 months.”
But he added: “For heaven’s sake let’s have a sensible debate based upon the evidence rather than hearsay and the prejudice of an MP who has never quite got over being called a moron.”