MP calls on government to stop pub chains from ‘bullying tenants’

Large pub chains like Greene King are still “gaming the system” to pressure tenants into accepting poor deals, according to an MP leading an enquiry into the effectiveness of the Pubs Code.

Labour MP Rachel Reeves said that there is evidence that pub groups are “bullying tenants”, calling on the government to enforce the Pubs Code, which was introduced in 2016 to give tenants more rights and greater protection when dealing with the large pub companies that own tied pubs.

“Two years on, the reality is that neither tenants or pubs companies are satisfied that it is working,” Reeves wrote in a letter to business minister Richard Harrington on Tuesday 10 July.

“There is evidence, acknowledged by the Pubs Code Adjudicator, that some of the big pub companies, such as Greene King and Ei, are gaming the system.

“The fear is that big business is bullying pub tenants up-and-down the country by pushing them into accepting poor terms. Profits are being hoovered up by these pub giants while the efforts to break free of the tie by these small, local businesses ae being frustrated at every turn.”

Campaigners within the independent beer and pub sectors argue that expensive pub ties, where tenants buy beer from the pub company which owns their premises, are responsible for the widespread closure of pubs in the UK over the past decade.

Figures released by The Campaign for Real Ale (CAMRA) found that UK pubs were closing at a rate of 29 per week in 2014.

Since then, a number of initiatives have been launched by CAMRA alongside MPs to ease the rate of decline in the on-trade.

Back in March the treasury announced it would ease business rates for 90% of pubs, providing a £1,000 discount to business rate bills for all properties with a rateable value below £100,000.

But Reeves argues that beer ties are still preventing the sector from growing, as landlords are forced into buying beer from pub groups for expensive mark-ups, squeezing profits.

While the rate of closures has slowed, Reeves is calling on the government to “put pressure on the Pubs Code Adjudicator to tackle these failings in how the Pubs Code is currently operating.

“The PCA needs to get the pub companies to act now to ensure they cooperate with the Code and not just sit on its hands and wait for the review next year.”

An Ei Group spokesperson told the drinks business the pub chain “has worked hard over the last two years to support our publicans as they navigate what is a highly complex pubs code.

“We have engaged widely with all stakeholders, including the Pubs Code Adjudicator, and will continue to do so with the clear aim of securing clarity and a successful outcome for our publicans, for Ei Group and for the wider pubs industry.”

Greene King did not immediately respond to a request for comment.