Statutory Code: Heineken says Government risks 'two tier' support for tenants

Heineken, which owns c1,300 leased outlets under its Star Pubs & Bars vehicle, said the Government offers “no evidence” that its licensees are worse off than tenants of companies with fewer than 500 pubs.

“By setting a threshold the Government would establish a two tier system where some tenants have less protection than others,” Heineken told the Government in its submission to the consultation on the statutory code.

“We believe that companies of all sizes which operate fairly should have nothing to fear from being included.”

'Lack of ambition'​

Heineken said the Government’s proposals “represent a worrying lack of ambition for British pubs” and are “simply an attempt to manage decline in the industry”.

The company said this is “at odds” with the Heineken’s “vision to work in partnership with our tenants to improve their offering to customers and reverse the trend of more and more people spending less time and money in pubs”.

Heineken outlined three “significant unintended consequences” of the proposals:​

1) Restricting investment, “the lifeblood for pubs”, leading to closures for some pubs in the short term and continued decline in the medium and long term for others.

2) Tenants who are already operating at the higher end of the income scale will benefit most while those on low incomes, whom the Government wishes to help, will receive less support.

3) More pub companies will be forced to adopt a purely commercial property relationship, “which will remove the partnership approach and be detrimental to many pubs”.

'Shrinking cake'​

Heineken added: “The proposals aim artificially to allocate tenants a slightly larger slice of a shrinking cake.

“Our vision for Star Pubs & Bars is not about managing decline. It is about increasing the size of the cake by focusing on the things that will attract more customers back to the pub. This will ensure that tenants enjoy higher and more sustainable incomes.”