The Shepherd Neame chief executive also accused the Department for Business, Innovation & Skills (BIS) of failing to recognise the difference between tenancies and leases.
The draft statutory code says all pubcos must appoint a “suitably qualified employee as code compliance officer”. That person would be a point of contact for tenants and any authority making enquiries relating to the code including the adjudicator. The draft code stipulates the compliance officer must not be managed by a business development manager.
For pubcos with more than 100 tied tenants compliance officers would be expected to deliver an annual report, detailing all code breaches or alleged breaches identified by tenants and the steps taken to rectify them as well as disputes regarding terms of tenancies.
Neame said: “The presumption all along was that companies of less than 500 pubs would be excluded. It’s a surprise we find that we are included.
Differences
“I’m surprised there is no distinction between tenancies and leases because they are fundamentally different in law and in practice.
“Initial indications suggest small companies, and down to very small companies, would still require a compliance officer. There is also a requirement for external validation of rent and a very prescriptive relationship between the district manager and the licensee which could undermine the trust that exists in that relationship.
“The cost of being part of the code is also a concern — £90 a pub might not sound a lot, but it all adds up.” Neame aired his concerns about smaller companies being covered by the core code to Community Pubs Minister Brandon Lewis at last week’s Tenanted Pub Summit.
Lewis replied: “There is no good argument as to why a tenant who is dealing with a company that owns five pubs should not expect the same level of fairness as a tenant of a company with 5,000 pubs.”