Queen confirms bill to protect pub tenants

The Queen has formally recognised a bill to introduce a new statutory code to protect tied-pub tenants in England and Wales from unfairly inflated rents and excessive beer prices.

In her speech today, the Queen set out the UK’s legislative agenda for the year announcing 11 bills set to go before Parliament, including the Small Business, Enterprise and Employment Bill for England and Wales, which includes protective measures for tied pub tenants.

Yesterday the UK Government announced plans for a set of statutory laws which will give tenants tied to large pub companies the right to a review of their rents by an independent adjudicator, who will manage disputes and ensure tenants get a fair deal.

Currently 28 pubs in the UK are closing every week with rising rend and inflated stock costs forcing many out of business, with more than half of tied pub tenants reporting earnings of less than than minimum wage (£10,000) following a suvery by the Campaign for Real Ale (CAMRA)

Deputy Prime Minister Nick Clegg said British pubs were a “national treasure and the envy of the world” and were often “the centre of our community” but that for too long landlords who are tied to larger pub companies have struggled to make ends meet.

The industry has welcomed the proposed code, however Brigid Simmonds, chief executive of the British Beer & Pub Association, warned against changes which could have a knock on affect on regional breweries, and the importance of the fundamental pub-company model continue.

She said: “Proponents of legislating for landlords to be forced to offer a mandatory free-of-tie option, fail to see that reducing the commercial buying power of the pub company would destroy the model and threaten the closure of vast numbers of pubs throughout the country with thousands of vital jobs lost – as acknowledged by the Government’s own economic analysis.

“Why would the pub company invest capital in a business if they did not know that at the end of five years they would still be making a reasonable return from their drinks tie? Regional breweries, often major local employers would be under serious threat of closure without the guaranteed route to market via their tied pubs.”

She went on to state that independent tenants were not necessarily getting a better deal on the cost of beer.

She said: “In reality, the support for the tied pub by the pub company is far greater than anything offered by a commercial landlord. They have a shared interest with the lessee as co-investors in making the pub succeed. Pub companies have sought to protect tenants and lessees from the hardest impact of the recession. Year on year and for the past four years, beer has been cheaper in tenanted and leased estates than in independent estates and in tied pubs a much greater proportion of local cask ale is sold; some 81% compared with 60% in independent pubs. The distribution of beer from smaller breweries is achieved through the buying power of the larger pub companies and a competitive market. New routes to market for smaller producers have opened up through their engagement with pub companies, who have recognised that consumers are demanding a broader range of drinks in their pubs.

“Light touch legislation is one thing, but at the end of the day, pub companies need to be able to support small individual tenants who with very little capital are able to run their own business. Anything which dilutes this support would be very unwelcome and destabilising for the pub sector.”