Tenanted Pub Summit: Shepherd Neame chief claims there will be no statutory code

Speaking at the Tenanted Pub Company Summit earlier this week he said:  “I’m going to stick my neck out and say that I don’t think there will be a statutory code. I think the consultation is too broad, too unfocused and too flawed.”

He argued that some good would come from the consultation – including greater transparency of the benefits provided to operators by their pub companies and more flexibility in short-term rents – but predicted that it would ultimately not result in legislation to regulate the relationship between pub companies and their tenants.

“There will be a strong steer coming out of it that there are still things that can be done to improve the model for both parties,” said Neame. “But the worst thing would be for the government to pour treacle on the industry when we have some outstanding new entrepreneurial companies and individuals coming forward – our experience is that the number of applicants [for Shepherd Neame pubs] has doubled in the last five years. We have some sensational new operators coming forward with great new ideas.

“Market forces will dictate that pub owners and brewers become more flexible in terms of the offer they give, be that beer choice or any other aspect of the agreement,” he added.

Meanwhile, the Shepherd Neame submission to the consultation which closed last week claimed that “Any Government intervention that threatened the basis of the tie would almost certainly result in the closure of the Shepherd Neame brewery.”

It also claimed it has “grave concerns” that during the four select committee enquiries there had been no call for evidence from smaller companies, no assessment of the difference between traditional tenancies and FRI leases, no appreciation of the capital risk beteen tied agreements (tenancy Vs lease) and a freehouse, lack of analysis of the evidence and little evidence from individual tenants.

Shepherd Neame said if a statutory code is introduced it would support the 500 pub limit as any lower and it would “impose a disproportionate burden on smaller companies.”