Brigid Simmonds - BBPA chief executive
There are real concerns about the market rent-only (MRO) option, which breaks the tie effectively.
There are thousands of small community pubs where licensees have benefited from the low-cost chance to obtain a pub. There are few industries where you can build a new business for such a small capital investment.
If the tie were broken, pub companies and brewers would lose their economies of scale. This, in turn, would reduce the substantial support (some £100m per year) they have been giving to licensees, through non-obligatory repairs, rent decreases, barrelage cost reductions, marketing, Wi-Fi, or Sky costs. Specifically for new licensees, PEAT (pre-entry awareness training) also adds to this level of support.
It would also leave pubcos with less capital to invest, which currently amounts to a minimum annual investment of £200m.
As a result, many more pubs would become unviable, as the Government’s own research shows.
Then there’s small breweries. There is already greater choice of beer in tied pubs. Some 81% offer cask ale, compared to 60% of independents. This is because the pubco undertakes national distribution of beers.
Many family brewers sell up to 25% of their beer through pub companies or larger brewers. If this distribution were lost, most small brewers would lose access to this valuable market.
Greg Mulholland MP - Chair of the Save the Pub Group
Tuesday 18 November will go down as one of the most significant days in the history of the British pub. Tears were shed, pints were pulled and celebrations took place in thousands of pubs up and down the country.
Then on Thursday, we had the news. The Government was accepting NC2 — or rather Part 4 Clause 42 — as it now had become. So it will become law, it’s done. It is time for all those involved to adjust and move on.
In a desperate bid, it appears more to save their own discredited association than members’ interests, the so called British Beer and Pub Association (BBPA), trawled round studios claiming the collapse of civilisation as we know it. The problem is that no one believes them any more. As beer writer Pete Brown has said: “At best, the organisation responsible for promoting beer and pubs is being overly gloomy and pessimistic about its future. At worst, the BBPA is being deliberately misleading and alarming on an issue that hasn’t gone its way.”
Indeed, the latest and 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 misguided bid to halt something that cannot now be halted. That could well become a self-fulfilling prophecy and its members should review whether it makes sense to fund this bizarre and desperate approach.
The reality is that gradual implementation of the clause will allow companies time to adapt.It does not abolish the tie, it stops the abuse of it. So it is time for the BBPA to stop misquoting already dubious figures that don’t relate to what has actually been voted through and to stop talking down its own members’ chances of survival. It is time for the large pubcos to accept the decision and prove that their businesses are sustainable ones, as they claim they are. Simon Townsend said: “We continue to believe the tie offers the best operating model for the vast majority of our publicans.” So prove it now, Simon, Stephen, Andy et al.
The political fact is that the argument has been comprehensively won. In reality, for all their threats of legal action, the large companies and their well-paid lobbyists and public affairs companies know that. 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, you should never have been allowed to trade for so long. This genie can never now be put back in the bottle. It is time for a fair deal for our locals.