Sunday, April 24, 2016

Government to discuss Pubs Code with British Beer and Pub Association which deems key parts "unworkable"

As reported in City AM by Francesca Washtell @fwashtell

My comment on CITY AM. AS of 11.00 Saturday 23 April it hadn't been approved.

It's understandable the British Beer and Pub Association is begging for 'transition' time to train its members '1000 colleagues' because in the last eighteen months these highly trained 'Business Development' employees have been going round the 13,000 or so tied pubs in their massive estates and telling their tied 'business partner' tenant leaseholders (publicans to the general public) that MRO (the Market Rent Only option - the legally enshrined right for publicans to become free of tie and to retail beers they source from the open market at open market price (read: real ale; craft and smaller batch beers customers actually want to drink; and the same old global brands we all know and love, at prices that don't need a mortgage advisor to arrange when buying a round) that:

a) MRO will not apply to them

b) MRO will mean their rent will double, or even treble to compensate the pubco's for loss of profits on the beer or

c) if the leaseholder tells the pubco they intend to go for MRO the pubco will give the tenant notice to quit for either:

i) taking the pub back to become part of their newly established managed pub estate

ii) intention to change of use.

There are stories among tied publican circles of pubco's coercing tenants to sign new contracts in advance of the legislation (this is called 'gaming) and many more examples of pubco's selling large numbers of pubs, hundreds, in one go and with them their sitting tenant tied publicans to property developers who won't be affected by the legislation and are then increasing the wholesale prices and reducing the number of beers the tenants can buy... and squeezing them to leave their pubs and homes to be turned into shops or housing. It is a feudal nightmare if you're a publican under one of these profiteering bully boy pseudo pub companies.

The need for legislation was first clearly identified by Select Committee in 2004 since when there's been five further Govt investigations and more market consultations in the pub sector all establishing that pubco's were profiteering by asset stripping Britain's pubs and serially churning tenants through leases then, when the pubs have been run into the ground, flogging them off for alternative use.

In short pubco's have only had twelve years' notice that their mediaeval business practices were on watch; Two years' notice of legislation being definitely likely to be implemented; 18 months since the proposed regulations passed into law in principle and six months since the detail of written draft law was published, to get themselves ready to tell their colleagues that they can no longer shaft their thousands of tenants and get away with it with impunity.

No wonder the pubco's need another six months to begin packing their bags on bad business practice.

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