Enterprise Inns latest to condemn House of Commons vote on tied pubs

The chief executive of Enterprise Inns has become the latest industry figure to condemn the House of Commons vote to amend rules on tied pubs yesterday.

In a statement to the City of London, Townsend highlighted that the government itself had rejected the "market rent only" option, and claimed that the move would be damaging to pubs and the wider industry, and risk thousands of pub closures, job losses and reduced investment.

He added: "We continue to believe the tie offers the best operating model for the vast majority of our publicans… in the meantime we will monitor the situation closely and await the government's response to this unwelcome development."

The House of Commons yesterday defeated the government by 284 votes to 259, in a reform bill proposed by Liberal Democrat Greg Mulholland MP, designed to allegedly make the sector more competitive by ensuring "market rent only" for the pub industry. Current laws mean that "tied" pubs pay lower rent but higher prices for their drinks than non-tied pubs.

It has since been reported that pub shares have dropped significantly in the past 24 hours, including Punch Taverns by almost 11%, Spirit more than 7%, and Enterprise Inns' shares themselves down by more than 15%.

Although the Campaign for Real Ale (Camra) and the Federation for Small Businesses welcomed the move, the British Beer and Pub Association (BBPA) criticised the decision, calling it "hugely damaging", and a move that "effectively breaks" the tie that has "served Britain's unique pub industry for nearly 400 years".

Other pub companies to have criticised the vote included Punch Taverns.

If the decision were to become law, the "market rent only" plans would be phased in over the next five years.

The news comes just days after Enterprise Inns said it had seen "significant progress" for the year to 30 September 2014, despite its pre-tax profit remaining flat at £121m.

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