Wednesday, October 16, 2013

Federation of Small Businesses Research Shows Pub Sector Reform Will Be Positive Move

New research shows that pubco reform would mean thousands more jobs and a cheaper pint in the pub!

The Fair Deal for Your Local campaign has today welcomed new research from the Federation of Small Businesses which shows that pubco reform would mean more jobs and investment in the British pub sector.

The results of the survey, which quizzed over 500 tied publications on their experience of the tie, came out overwhelmingly in favour of reform.

Nine in ten of all licensees (89%) and (99% in London) said that they would take a market rent only option (a free-of-tie option with an independently-assessed free rent) if this were on offer.

When questioned about how they’d run their pub if a given this option, 75% of tenants said they would take on more staff or increase staff hours, 78% would invest in pub maintenance and 73% would invest in modernisation. Almost all tenants (98%) agreed they would have more confidence in the future of their business if they were free of the tie.

This shows the dramatic effect that allowing pubco tenants a market rent only option would have. In the UK as a whole, with the proposed Government statutory code due to apply to companies of this would mean:

- 9,888 pubs would take on new staff or increase staff hours.
- 10,359 would invest in pub maintenance

- 9698 would invest in modernisation

It also confirms that Britain’s burgeoning brewing sector would benefit, 91% of the licensees, who currently can’t, would deal directly with the over 1000 microbreweries in the UK. It would be great news for beer lovers too, with 8,213 pubs currently forced to buy from pubco lists would offer a wider range of beers.

In great news for consumers, a whacking 8,614 pubs in the UK would use the extra profits to bring down the price of a pint. This also exposes how the extortionate prices charged by the indebted pubcos to their own tenants is a key reason for high pub prices, a reason cited by some people as to why they have stopped going to the pub.

Currently 79% of tenants said that they felt that their pub owning company was taking more than a fair share of the pubs profits, something that has also been shown by the findings of successive Select Committee reports and CAMRA’s 2013 survey on the disgracefully low levels of income of licensees of the large companies.

John Allan, National Chairman, Federation of Small Businesses, said:

“Creating an environment for pub landlords to thrive will stem the flow of closures and create more jobs for the economy.

With more than half of respondents feeling they pay more rent to their pubco than they would on the open market, it is clear landlords need a fairer deal. Not only would this put them on a level playing field with non-tied pubs, but would help create jobs and boost local economies.”

Greg Mulholland, Campaign Coordinator of Fair Deal for Your Local and Chair of the All Party Parliamentary Save the Pub Group, said:

“This new research proves what we have known all along – that a statutory code of practice for the large pub owning companies with a market rent only option for tied tenants would be very positive not only for those pubs but for the UK economy.

“This research clearly shows that reform would create jobs and investment in the pub sector as well as increase choice for consumers, help smaller brewers and reduce the price of a pint across thousands of British pubs.

“Despite the best efforts of the pubcos and their lobbyists, the BBPA, to claim that simple, market based pubco reform will somehow damage the sector, the clear reality is that a market rent only option will help the economy as a whole.

“BIS Ministers have been asking for evidence this is real evidence with very clear conclusions. So now it’s time for the Government to act, not only to allow pubco tenants the chance to compete, innovate and invest but also to boost the UK economy.”


Notes to editors

1. The data is based on a telephone survey carried out by an independent research company on behalf of the FSB. The survey of 516 tenants of the big pub companies (both members and non-members of the FSB) took place in August and September 2013.

2. The survey interviewed tenants tied to the six big pub owning companies (who own more than 500 pubs) – these are: Enterprise Inns, Punch Taverns, Admiral, Marstons, Greene King, Star Pubs and Bars.

3. Extrapolated data is based on the following list of pubs owned which is sourced from the most recent (2012) of each company’s corporate reports: Enterprise Inns – 5,720, Punch Taverns – 4,529, Admiral – 1,222, Marstons – 1,000, Greene King - 1231, Star Pubs and Bars – 1,342.

4. Research by CGA Strategy and commissioned by CAMRA showed that 57% of tied tenants earn less than £10,000.

5. The Fair Deal for Your Local campaign is a coalition of ten pub industry organisations including The Federation of Small Businesses, The Forum of Private Business, CAMRA (The Campaign for Real Ale) GMB trade union.

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