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Heineken warns against UK pub industry reforms
Heineken, the world’s third biggest brewer, has warned the UK government that plans to regulate the country’s pub industry will be a “barrier to growth” and will reduce investment.
The Sunday Telegraph reported that the Dutch company has weighed into the debate between the Department for Business, Innovation and Skills (BIS) and the main pub companies.
BIS has called for a code of conduct for pub companies with more than 500 pubs, which will be back up by law. Heineken responded to a consultation on the BIS proposals by saying that the plans will affect investment decisions and had plunged the market into uncertainty.
The newspaper reported that Heineken, which owns around 1,300 pubs, had argued the proposals to subject pub companies with more than 500 sites to a statutory regime would create a two-tier system that would lead to pub closures and discourage expansion. It is also worried that the plans could lead to its tenants selling beers from a rival brewer, which would give it “no incentive” to invest in its pubs.
Lawson Mountstevens, UK sales managing director for the on-trade at Heineken, said: “There isn’t any evidence that below 500 pubs it’s a completely different market or customer experience.
“It is a barrier to growth, instantly. You could be developing a small pub business and have ambition to grow and you’d always be thinking: why would I go above 500 sites? Why would I invest in the 502nd one?
“In terms of our ambitions, of course it creates uncertainty and it would put any further ambitions for anyone coming into the UK tenanted pub market on hold.”
Pub companies hope that, if the legislation is pushed through, it will be examined by the Office of Fair Trading on the basis that it disadvantages businesses with more than 500 sites.
UK business secretary Vince Cable has previously expressed the need for a change in the law in order to “shift behaviour”, adding that pub companies have exploited and squeezed “their publicans by unfair practices and a focus on short-term profits.”