Enterprise writes to BIS to pledge cap on tied price rises

The commitment follows a story in the Publican’s Morning Advertiser​ (PMA) in which Enterprise chief executive Ted Tuppen said he would consider the move following calls for pubcos to ensure lessees’ margins are not eroded by above-inflation annual beer price rises.

Tuppen conceded that, as beer prices are not currently specified in lease contracts they could “in theory” escalate between rent reviews and lease renewals.

In its latest letter to BIS, Enterprise said: “We are planning to introduce a contractual obligation upon ourselves to link changes to price lists and discounts and provide contractual certainty that they cannot be excessive or unjustified.”

Exceptional circumstances​

Separately, Punch Taverns has written to BIS explaining its stance on the issue.

In its letter, Andy Slee, external affairs and central operations director, said: “Our position on beer prices has been published for several years in the Punch Code of Practice, which goes beyond the statutory code.”

In its code of practice Punch says it will not sell a product to anyone above any brand owner’s published wholesale selling price and will not “in general” impose price increases greater than the brand owner’s published wholesale prices except in exceptional circumstances.

Punch average price increases​

Punch revealed that since 2010 its average price increases have been in line with market levels or below.

In 2012 the average brand owner wholesale increase was 3.7%, while Punch’s average price rise was 3.4%. This year the average brand owner increase was 3% and Punch raised its prices by the same amount.

Campaigners have claimed that pubcos get a significant discount off the wholesale prices due to their bulk buying and that these discounts are not passed on to their licensees.