That’s the stark reality put forward by industry consultant Phil Dixon in his submission to the Department for Business, Innovation & Skills (BIS).
Dixon had the following recommendations for the Government:
- Machine tie: full free-of-tie option for all licensees on FRI (full repairing and insuring) agreements at the next rent review
- Beer tie: a minimum level of beer discounts to be set by the Industry Regulatory Board for all FRI leaseholders. IPC to be invited to observe these deliberations.
- Non-beer ties to include in the Framework Code the rights to price and trade mark that were enshrined in the old EU regulation that the industry worked under from 1985 to 2000.
- Cask ale freedom for FRI leaseholders with non-breweries. This could be introduced by using a qualitative criteria based on volume and standards.
- No tenant should sign a substantive tenancy agreement without a reasonable level of pre-entry training.
- RICS (Royal Institution of Chartered Surveyors) guidelines need to be reformed to stop the exploitation of tenants whether tied or not.
He also called the threshold of the code being applied to pub companies with 500 pubs or more “an artificial figure and unnecessary”. Dixon noted that this could result in penalising pubcos that are treating their tenants in a fair way.
He praised Admiral Taverns, saying, “Why their future should be undermined by the threat of statutory regulation is difficult to comprehend.”
Dixon added: “So my view is that Government should look at the Full ‘Put and Keep’ repairing and insuring agreements as to where the imbalance lies and not on the number of pubs a particular company holds.”
He also wrote that BIS is right to suggest a guest beer option, but he feels that licensees would rather opt for a lager from a global brewery. Dixon said that this would destroy many family and regional breweries where beer accounts for 41% to 54% of sales. He quoted Hall and Woodhouse, Dorset (40% of sales), SA Brain, Cardiff (41%), Robinsons, Stockport (47%), Charles Wells, Bedford (51%) and Daniel Thwaites, Blackburn (54%).
“All of these companies, I would suggest, would find it difficult to remain in business if their licensees were able to obtain an international lager brand such as Carling, Carlsberg and Fosters from a supplier of their choice,” Dixon wrote. “If MPs want to abolish the tie then this measure will quite simply achieve this.”