BEIS committee chair calls for immediate action on pubs code

10-Jul-2018 - Last updated on 10-Jul-2018 at 08:45 GMT

Under pressure: Rachel Reeves joins the calls on the government to urgently review the Pubs Code (Image credit: Stephen Sweeney)

Rachel Reeves, chair of the Business, Energy & Industrial Strategy Committee, has written a letter calling for immediate action to ensure the pubs code protects all tenants.

Campaigners have claimed the code does not create a level playing field between pub tenants, with tied tenants put at a disadvantage by loopholes in the code.

In a letter to the BEIS minister, Richard Harrington, Reeves said larger pub chains have been allowed to intimidate tenants into agreeing to poor terms, since its introduction in July 2016.

This follows the sending of a letter from the British Beer & Pub Association (BBPA)’s chief executive Brigid Simmonds to Harrington making clear the conditions pubcos would agree to in order to waive confidentiality on the publication of arbitration decisions.

'Two years on'

“The pubs code was supposed to give tenants more rights and greater protection when dealing with the large pub companies that own tied pubs,” said Reeves.

“Two years on, the reality is that neither tenants nor pubs companies are satisfied that it is working.”

She argued some pub giants are “gaming the system”.

“There is evidence, acknowledged by the pubs code adjudicator, that some of the big pub companies, such as Greene King and Ei, are gaming the system.

'Bullying pub tenants'

“The fear is that big business is bullying pub tenants up-and-down the country by pushing them into accepting poor terms. Profits are being hoovered up by these pub giants while the efforts to break free of the tie by these small, local businesses are being frustrated at every turn.”

Reeves urged the minister to push the pubs code adjudicator to resolve the code’s failures and said a review could not wait until next year.

“I urge the Minister to put pressure on the pubs code adjudicator to tackle these failings in how the pubs code is currently operating. The PCA needs to get the pub companies to act now to ensure they cooperate with the code and not just sit on its hands and wait for the review next year.

Parliament review

“If the Minister and the PCA are not able to deliver progress in ensuring the code works in the way parliament intended, parliament will need to revisit this issue and determine whether further legislative changes are required to protect pub tenants.”

An urgent review of the code has also been supported by the shadow business minister, Gill Furniss, who said the code does not treat smaller pubs fairly, and CAMRA, which maintains that gaps in the legislation are exploited.

A spokesperson for Ei Group said it would continue to work with the PCA to secure a positive result.

"Ei Group has worked hard over the last two years to support our publicans as they navigate what is a highly complex pubs code," they said.

"We have engaged widely with all stakeholders, including the Pubs Code Adjudicator, and will continue to do so with the clear aim of securing clarity and a successful outcome for our publicans, for Ei Group and for the wider pubs industry.