Pub firms see red amid plans to cut ‘beer tie’

Like other major pub operators, Greene King chief Rooney Anand is opposed to 'unnecessary' statutory code. Picture: PA

Ministers also announced plans for a new code of practice following complaints about the so-called “beer tie”, which forces tenants to sell the pub owner’s beers, often at high prices.

The code would contain mandatory rules for companies owning more than 500 pubs and would aim to stop abuses of the beer tie, which has been partly blamed for pub closures.

Business Secretary Vince Cable said pub companies had been given “every chance to get their house in order” but it was clear that a voluntary approach had failed to prevent tenants being over-charged for their beer and rent.

He added: “Pubs play a valuable role at the heart of our communities and we urgently need a change to help them survive and become profitable. These plans will do just that and could save pub tenants £100 million a year by making sure than pub companies charge their tenants fair rents and beer prices.”

But Rooney Anand, chief executive of Belhaven parent company Greene King, said his company had introduced its own code of practice 15 years ago and the “unnecessary” statutory code would have negative consequences for the UK pub industry.

He added: “We will contribute fully to the consultation outlining our position that responsible self-regulation is in the best long-term interests of both licensees and landlords.”

The consultation on the proposed code of conduct runs until 14 June. Along with Greene King, which has 1,300 pubs, the plans would affect

Admiral, Enterprise Inns, Marston’s, Punch Taverns, Spirit, Star, Trust Inns and Wellington.

A spokesman for Punch Taverns said the group was “confused” by the government’s approach to pubs, given Chancellor George Osborne’s decision last month to cut 1p off a pint and scrap the beer duty escalator.

He added: “This year’s Budget provided much-needed support to Britain’s pubs, but the government is now proposing a state-backed pubs quango.

“A founding commitment of the coalition was to reduce regulation, but ministers now seem intent on wrapping Britain’s pubs in red tape.”

However, the Forum of Private Business said the move was a “long overdue” step towards enforcing fairness across the UK’s 50,000-strong pub sector.

A spokesman said: “This development should help restore the balance of power. The adjudicator model, funded by the companies it investigates, is therefore a direct incentive for them to improve the current system too.

“Pubs are small businesses and are an inherent part of the communities they serve, much the same as local shops are. We need to make sure they can survive and trade profitably on a fair and level playing field, and this seems the only way to achieve those conditions.”

The Campaign for Real Ale (Camra) estimates that 18 pubs close each week across the UK and the organisation’s chief executive, Mile Benner, said

yesterday’s announcement was “fantastic news” for licensees and small

brewers.

Benner said: “The large pub companies have been given repeated opportunities to deliver effective self-regulation but have failed to do so.

“Guest beer and market-rent only options promise to be a major boost for Britain’s thriving independent brewery sector as well as the pub sector. Over 1,000 small brewers who are currently locked out of supplying local pubs will now be able to make their beers more widely available to pub customers.”