British Beer & Pub Association issues caution over ALMR Benchmarking survey figures

The survey showed that rents remain higher as a proportion of turnover among tied pubs than free-of-tie pubs in this this year’s Benchmarking Report from the Association of Licensed Multiple Retailers (ALMR).

The report showed that among tied pubs, rent averages 10.7% of turnover, which is down from 12.3% in 2012, but still higher than the 2010 figure of 9.4%. Among free-of-tie leased pubs, rent averages 9.0% of turnover, which is down from 10.7% in 2012.

 Brigid Simmonds, BBPA chief executive said: “The survey only captures a very small of part of the tied pub market so should be treated with extreme caution. The findings appear to contradict other recent research showing higher rent for the largest free-of-tie pub operator compared to tied pub companies.

"We would also be very cautious about considering particular elements of the survey such as rent in isolation. The survey also appears to show that controllable costs among those tied pubs surveyed are significantly lower and even accounting for a lower margin on drinks, would lead to a higher operating margin for these pubs.”

However, the Fair Deal for Your Local campaign has renewed calls for a statutory code of practice for large pub owning companies following the report. 

The Fair Deal for Your Local campaign, which is currently backed by 170 MPs as well as tenants, breweries and consumers alike, is calling on the Government to enshrine in law the long accepted but largely ignored principle: that the tied licensee should not be worse off than a free of tie licensee. 

Greg Mulholland, chair of the All Party Parliamentary Save the Pub Group and Campaign Coordinator of Fair Deal for Your Local, said:  “The news that for the second year running tied tenants are getting a worse deal than free-of-tie tenants when it comes to rent shows exactly why the Government need to take this issue seriously and introduce a statutory code of practice for large pub-owning companies.

“This year’s Benchmarking Report from the ALMR shows that the large pub-owning companies are continuing to overcharge tied tenants.

 “The only way we can stop this chronic overcharging is for the Government to introduce a market rent only option in a statutory code of practice for all pub-owning companies who own more than 500 pubs. The tied licensee should not be worse off than a free of tie licensee.”