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Government to review legal loophole affecting pub industry

31 December 2010
Government to review legal loophole affecting pub industry

The Government is to review a legal loophole which allows breweries and pub companies to sell off pubs and prevent them from being reopened by a rival operator.

Pubs Minister Bob Neill has launched a public consultation into the use of restrictive covenants, which are often used to put limits on future use of buildings.

The Campaign for Real Ale (CAMRA) welcomed the move arguing that such covenants are used to stop competition.

CAMRA chief executive Mike Benner commentedd: "Restrictive covenants are used by pub companies to deprive local communities of their pubs, at a time when 29 pubs are closing every week. Between 2004 and 2009, this happened to almost 600 pubs."

He welcomed the consultation as a "great success for localism". "It shows that government recognises that pubs are vital community assets that need to be protected," he said.

"For the new community right-to-buy scheme to work, pubs need to be available for communities to keep open. It's a victory too for people power: this proposal came from communities on the ground, via their local councils who put the proposals to central government."

BBPA calls for 30 day VAT increase delay after big freeze >>

Labour and Tories vow to preserve community pubs >>

Government tells pubcos to relax the beer tie as part of new action plan for pubs >>

By Kerstin Kühn

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