MPs to debate reforms to beer tie

09 March 2011 by
MPs to debate reforms to beer tie

Camra, the Campaign for Real Ale and the Federation of Small Businesses (FSB) have both offered their support for further reform of the beer tie, as Parliament debates the Tied Public Houses (Code of Practice) Bill.

The Ten Minute Rule bill is being presented in Parliament today by Martin Horwood MP.

Any MP may introduce a bill under the Ten Minute Rule, although in practice it is only used by backbenchers.

Camra said the bill was a "simple solution to the complex problem of the ‘beer tie'" and would improve lease conditions for tied publicans, increase consumer choice, quality and value at the bar.

It would require the Government to introduce a statutory code of practice to require pub companies to provide their tied lessees with a guest beer option and the option to become free of tie, accompanied by an open market rent review.

The Business, Innovation and Skills select committee report into pub companies in 2010 means that pub companies have until June 2011 to self-reform and improve their business practices. Failing to do so will result in pressure on the Government to intervene and implement a statutory code of practice requiring the large pub companies to offer guest beer and free-of-tie options to all their tied publicans.

Before the reading of the Tied Public Houses (Code of Practice) Bill, Martin Horwood MP, said: "Tied licensees are being strangled by high rent and high beer prices, and small businesses are subsequently going bust and pubs are closing. Such losses have a devastating impact on community life, and it's about time tied licensees were given greater flexibility in this difficult economic climate. Pub companies have been dragging their feet over the beer tie issue since a Trade and Industry Committee report in 2004, showing simply that voluntary reform is not working.

"Progress by the large pub companies has been limited so far and the voluntary approach appears to be failing. While companies have introduced new codes of practice these codes are seeking to do as little as possible and do not offer the free-of-tie options and guest beer rights urged by the Business Select Committee and Government."

Mike Benner, Camra chief executive, said: "Camra remains steadfast in its commitment to reform the beer tie and help deliver a fair deal to the consumer and a vibrant pub sector. Tied publicans, on average, pay around £20,000 more for their beer every year as they are unable to purchase beer on the open market.

"What needs to be put in place is a self-balancing mechanism to ensure that the large pub companies offer tied publicans a fair deal, allowing them to compete effectively and therefore remain in business. A free-of-tie option accompanied by an open market rent review will ensure that large pub companies cannot exploit tied publicans as if they do so those tied publicans will be able to opt out. No company code currently offers a genuine free-of-tie option at this time, and none provides a guest beer option to all, so it is now down to the Government to remove punitive constraints on struggling tied publicans to help avert the current pub closures crisis."

Clive Davenport, trade and industry chairman, Federation of Small Businesses, said: "Tenanted pubs are being crippled by high beer prices and rent. Pub owners are having inflated prices imposed on them by the pubco which then has to be passed on to the customer for the pub to survive. As we have all heard time and again, pubs are closing at a rapid rate, and if action is not taken now the great British pub will become extinct. The dramatic number of pub closures does not just affect the tenants and their families, but the wider community as well.

"Tenanted pubs are not given a fair deal from the pubcos that own them, so it is vital that action is taken to make this relationship fairer. This bill would finally help to tackle a failing system and without such urgent action we could see the pubs at the heart of our communities disappear forever."

OFT rejects Camra super-complaint over beer tie again >>

The beer tie: close to breaking point? >>

Beer tie row rumbles on >>

By Neil Gerrard

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