A fair deal for local pubs: Change is happening, so now all sustainable companies must embrace it

A day that many thought would never happen, a day that hundreds of thousands of pounds have been spent to try to prevent happening.

In the end, it showed that however much money you have and whatever connections you may have with a few MPs and Ministers, you cannot stop people power.

You cannot stop democracy. Only the bullet proof glass on front of the Strangers’ Gallery of the House of Commons prevented MPs from hearing the huge roar from the group of dedicated campaigners who had come to see the outcome, never really daring to believe that they and we would carry the day and win.

Tears were shed, pints were pulled and celebrations happened, not just in the Enterprise Inns-owned Eagle Ale House in Battersea, where the incredibly hardworking volunteers of the Fair Deal for Your Local steering group gathered, but in thousands of pubs up and down the country.

Royal Assent

Then on Thursday morning, the 20th, we had the news. The Government were accepting NC2 - or rather Part 4 Clause 42 as it now had become. So it will get through the Lords, it will pass Third Reading and it will receive Royal Assent.

So it will become law. It's done. It’s over. It is time for all those involved, on both sides (and the fence sitters, you know who you are and why!) to adjust and move on.

It is time to shape the future of the sector and surely all who really care about pubs will seek to do that. Part 4 Clause 42 of the Small Business, Enterprise and Employment Bill may not sound particularly significant, but it is a piece of law that is much needed and that will change a sector and the fortunes of the Great British pub.

In a desperate bid, it appears more to save her job than her members’ interests, Brigid Simmonds, chief executive of the so-called British Beer and Pub Association, trawled round studios trying to claim that having to allow independent rent assessments at rent reviews and offer the simple benchmark of a fair non-tied rent would lead to the collapse of civilisation as we know it.

The problem for her, her now thoroughly discredited association and her members is that no-one believes her or them, any more. Not MPs (apart from a handful with links to pubcos or brewers), not most journalists and most certainly not the public at large.

The tie

Firstly, it is simply untrue to suggest that the beer tie is somehow being abolished. nor has it been the aim of the Fair Deal for Your Local campaign to do so. In reality, this gradual and market based measure simply puts an essential benchmark into the calculations and ensures that the pubcos have to provide fair, attractive tied deals, whereas at the moment, they have no incentive to do so once a deal has been signed.

The BBPA are also misrepresenting the findings of the rightly ridiculed London Economic report. Remember this is a report that simply took ‘confidential pubco data’ and calculated pub closures on the basis of what the pubcos told them, not the individual fortune of each pub business, when the far more credible Federation of Small Business did this, doing actual independent fieldwork and the result was a prediction of nearly ten thousand MORE jobs!

Yet the BBPA can’t even quote dodgy data in an honest fashion. They are substituting ‘will’ for ‘may’ and citing only the top end of a scale of possible predictions. As beer writer Pete Brown has said, “at best the organisation responsible for promoting beer and pubs is being overly gloomy and pessimistic about their future. At worst, the BBPA is being deliberately misleading and alarming on an issue that hasn't gone their way”.

Even worse, in actual fact, is the wholesale deception of using these figures at all – knowing full well that the clause very clearly brings in MRO gradually over a five-year period, is not open to new tenants and can only be triggered at rent review, lease renewal or significant change in prices or circumstances or sale of the pub. So for them to be (mis)representing this prediction as if all tenants could immediately go free of tie is simply wrong.

Doom and demise?

So Pete Brown is right, the is the most extraordinary part of the BBPA’s mishandling of this whole issue, is that now this once proud trade association is deliberately predicting doom and demise for its own members, in a desperate and misguided bid to halt something that cannot now be halted. The reality is that gradual implementation of the clause will allow companies time to adapt their business models.

The three giant and hugely profitable brewing pubcos – Marston’s, Greene King and Heineken – can and will all change and be part of a new, fairer pub sector, no longer leaving their leased pubs as the second rate part of the estate whilst coining it in their managed pubs.

Very deliberately – and to put paid to the nonsensical argument put forward by some ill-informed or complicit MPs – the Secretary of State has the power to ensure that brewers will be able to carry on insisting on their beers being sold in their pubs, which gives them, unlike the giant property companies, every reason to now be sensible and work with me, ministers and civil servants to make this reform work.

As for the non brewing mark-up merchants, Enterprise, Punch, Admiral and Spirit, now is the chance for them to at last prove their bold claims about the attractiveness of their tied deals.

As Simon Townsend has said "We continue to believe the tie offers the best operating model for the vast majority of our publicans."

So prove it Simon, Stephen, Andy et al. Now show what an attractive business model your tied leases are, by offering fair tied deals that only offer higher beer prices for a lower than market rent (which you don’t now) and real business support that your tenants want, rather than calling things tenants doesn't actually want or benefit from, some sort of benefit to them.

To any honest observer, all that Part 4 Clause 42 means to a fair and sustainable company is finally doing the very simple thing the Select Committee and Ministers have been asking these companies do to do - offering genuinely competitive deals to their own supposed business partners; deals that will allow them, as well as the pubco, to make money from the pub, whether they choose to remain tied or to pay rent only.

So it is time for the BBPA to stop misquoting already dubious figures, that don’t even relate to what has actually been voted through and to stop talking down their own members chances of survival.

It's time

It is time for the large pubcos to accept the decision and prove that their businesses are sustainable ones, as they claim they are. It is time to stop complaining and scaremongering, to stop threatening slash and burn like a retreating army and to instead sit down and make business models fair for both parties.

It is time to move on and start to face a more competitive and much more open market. So it really is time for the sector to accept this, whether a few companies and their discredited trade associations like it or not. The political fact is that the argument has been compressively won.

In reality, for all their threats of legal action, the large companies and their well paid lobbyists and public affairs companies know that. Too many MPs, from all sides of the House have heard from constituent licensees the unethical reality of the pubco tied model.

So the message is simple: accept the wind of change blowing through the sector and move to a fairer, more sustainable future and if you can’t, then you should never have been allowed to trade for so long.

The latter is what the BBPA’s current strategy is suggesting, indeed if they keep predicting doom it will become a self-fulfilling prophecy.

Optimism 

On the other hand I, the coordinator of the successful Fair Deal for Your Local campaign, is ironically more optimistic about their future and I await to see the fairer version of the tie that could once again make it a mutually attractive business model.

What I certainly look forward to a more open, more dynamic, more competitive pub sector with a more diverse ownership structure, with many more smaller, leaner operators involved – individual and companies, brewers and non brewers.

This is the change this sector has needed for years and all those with a future must embrace it. It need not be the end for Enterprise Inns and Punch Taverns, but it is the end of the skewed, unethical version of the tie that has done so much damage to so many pubs. They might not have seen our dramatic victory coming, but now that is has happened, the fortress walls have at last been breached and they can’t be rebuilt.

This genie can never now be put back in the bottle.

It is at last the moment of change. It is time for a fair deal for our locals.

Greg Mulholland MP is Chair of the Parliamentary Save the Pub group and Coordinator of the Fair Deal for Your Local campaign, CAMRA’s Parliamentary Campaigner of the Year and a Top 40 CAMRA campaigner of all time.​

Twitter: @thepubchampion