The British Beer & Pub Association (BBPA) and The Association of Licensed Multiple Retailers (ALMR) have issued prompt statements stating their different reactions – for and against – the Secretary of State’s proposals which were outlined in a letter of 8 January 2013 to the Chair of the BIS Select Committee, Adrian Bailey.
The letter states that the Government will consult in the Spring to put the existing Industry Framework Code on statutory footing. The Code will include the fundamental principle that the tied licensee should be no worse off than a free of tie licensee.
A new Adjudicator will have power to arbitrate on disputes and investigate complaints, and the statutory regime will apply to companies with a tied estate of more than 500 tied leases.
BBPA disappointment at the decision
The BBPA has expressed disappointment at the decision by the Government to consult on putting the pub Industry Framework Code into statute. Whilst the Association believes that statutory underpinning of recent industry reforms will result in unnecessary red tape and bureaucracy, it does however, welcome the endorsement of the tied house model and the clear distinction drawn between leases and traditional brewery tenancies.
The BBPA believes the industry has made considerable progress in establishing an effective system of self-regulation. There are new codes of practice in place, with discussions with industry partners on version six of the Framework Code, which deals with many commercial issues, now at a very advanced stage.
More opportunities should have been given for these reforms to work. The introduction of the PIRRS and PICA Services, with their low cost arbitration for rent and other complaints against pub company individual codes, has been acknowledged as professional and effective.
A Government-appointed adjudicator will be costly, says the BBPA, and the association looks forward to seeing the details of the reduction in other red tape required by the Government’s ‘one in, two out’ rule.
Jonathan Neame, Chairman of the BBPA, comments:
“It is disappointing that self-regulation has not been given a proper chance to work, after all the hard work from the BBPA, ALMR, FLVA, BII, and other industry colleagues on Version Six of the Code of Practice.
“However, today’s announcement does at least provide some clarity and certainty over the direction of policy. In the consultation, we will be urging the Government to ensure that any statutory process is light-touch and cost-effective, to protect consumers from bearing the brunt of unreasonable additional costs.
“BBPA members are working continuously to evolve the services and support they give to their licensee partners to ensure that tied houses offer the best investment opportunities in the pub market.”
ALMR welcomes the announcement
The ALMR has welcomed the announcement from the Secretary of State for Business that the Government will consult on establishing a statutory Code and adjudicator to oversee the relationship between pub companies and their lessees.
In the ALMR’s view, the proposal will give legal backing to the voluntary agreement currently being negotiated between the British Beer and Pub Association and trade bodies representing lessees, including the ALMR.
Commenting on the announcement, which comes ahead of a Parliamentary debate on the subject in the House of Commons tomorrow, ALMR Chief Executive, Nick Bish, said:
“Today’s announcement draws a line under the protracted and prolonged period of political uncertainty and debate, which has been going on for far too long without any clear end in sight. That can only be helpful for investment in the sector as a whole and for individual businesses in particular.
“The proposals unveiled by the Secretary of State today will not take effect immediately and that makes it even more important that all partners continue to engage in robust dialogue to finalise and implement quickly the substantive improvements outlined in the draft version 6 of the Code and the associated changes to the self-regulatory structure.
“This will not only mean that tied tenants and lessees will have greater transparency and more robust rent setting in the meantime, but also that those businesses which fall outside the scope of the proposed regulatory structure will continue to be protected.”