Vince Cable Aims to Call Last Orders on Greedy PubCos
Business Secretary Vince Cable has accused the large tenanted pub companies (PubCos) of unfair practices and promised to introduce a statutory code of conduct between PubCos and their landlords.
The PubCos, the biggest of which own thousands of bars across the country, have been accused of exploiting publicans for short-term gains.
The long-term problem has been the closure of many British pubs as many have been deemed as "unviable" businsesses and former publicans seeking new career paths after failing to make an adequate living in the pub trade.
Under the guidance of the British Beer & Pub Association (BBPA) the Pub Industry Framework Code of Practice was introduced last year, but Vince Cable has lost patience, saying that self-regulation was not working.
The biggest areas of concern regarding modern day pub company practices included the price of beer and rents – Most PubCos have a "beer tie" where the publicans are forced to only sell particular brands of beer and the rents have been "rigged" to be higher than market rates.
Backed by "a wide body of experts" the All-Party Parliamentary Save the Pub Group believes that only a statutory code of practice, a free-of-tie option, a review on rent and an independent adjudicator will fix the current hardships faced by pub landlords.
As an indication of the depth of the problem, an estimated 20,000 pubs have closed in the UK over the course of the last 30 years or so. Since 2009 3,500 of the pubs that have closed have been "tied" pubs.
Following a long-running campaign by All-Party Parliamentary Save the Pub Group, spearheaded by Greg Mulholland, the Liberal Democrat MP for Leeds North West, the issue of the PubCos was raised in the House of Commons last week.
The debate seemd to receive wide support from many MPs, most worried at the threat to the social and economic environment from the damage being caused to the pub industry. One million people are employed in the beer and pub trade.
Other factors that have added to the decline of the British pub include a lack of protection for pubs in the planning laws, where PubCos have been accused of "asset stripping", and the beer duty escalator which prices the increase in a pint of beer at the rate of inflation plus a further 2% which publicans, brewers and beer drinkers believe is unfair. Since the last Labour government introduced the beer duty escalator some 5,800 pubs have closed.