Pubco code of practice not improving relations, tenants warn

05 May 2011 by
Pubco code of practice not improving relations, tenants warn

A code of practice brought in to prevent tenanted pubs being crippled by high rents and beer prices is failing to work and nothing has changed, a business group has warned.

According to the Federation of Small Businesses (FSB), almost seven in 10 tenanted pubs said the pubcos' code of practice had not improved relations with the pubcos that own them.

Of the 74 pub owners quizzed, 69% said the new code had not helped the business partnership with their pubco.

The poll also revealed confusion around the meaning of the code. Of those that had signed up, half thought it was intended to be a legally binding contract for both sides, which would offer security from bad deals. In fact, it is only an agreement between both parties to help improve their relationship.

The FSB also warned that pubcos were threatening to penalise tenants for buying beer outside of their tie when they were not, by writing the use of flow-monitoring equipment into the code of practice.

It is calling for the code to be made into law which will provide tied tenants with the option to become free of the tie. It is also seeking an open market rent review and an option for selling a guest beer. In addition, the FSB is demanding that the code is written and overseen by an independent body that sits within the new competition body in the interim period before it is written into law.

The Government has promised to take legislative action if the relationship between pubcos and their tenants has not improved by June this year.

But BII chief executive Neil Roberston described the claims as "simply untrue".

"The codes are doing pretty much exactly what they said they would do, which is delivering transparency and reducing bullying and better preparing new entrants," he said.

"All complaints are thoroughly investigated. There are areas of the landlord and tenant relationship that are not within the current scope of the codes. Perhaps the tenants who have expressed concern are thinking about these? If tenants are in any doubt they should e-mail"

Clive Davenport, FSB trade and industry chairman, said: "There are still 25 pubs closing every week… The Government must fully enforce a code on the industry and ensure it is overseen by an independent body. Until then we could see the pubs at the heart of our communities disappear forever."

New code of practice on pub tie agreements published >>

Licensees disappointed with BBPA code of practice >>

BBPA defends its new code of practice for pubcos >>

By Helen Gilbert

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