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Licensees disappointed with BBPA code of practice

27 January 2010 by

Campaigners say Pub Industry Framework Code of Practice is still unfair to publicans and calls for mandatory rules for pub companies. Neil Gerrard reports.

The British Beer & Pub Association's (BBPA) attempt to make the relationship between pubcos and their tenants more "open and transparent" was met with a shower of protest this week.

For an industry used to pulling pints, it seemed few are as accustomed to pulling punches. Campaign group Fair Pint said there was nothing in the code that would help suffering publicans, while Justice For Licensees founder Inez Ward told Caterer: "It certainly doesn't go far enough, and it certainly isn't fair."

Meanwhile, the Campaign for Real Ale (Camra) labelled the code "disappointing" and GMB union national officer Paul Maloney, the man gearing up to organise potential industrial action over the beer tie, questioned whether the BBPA was the right organisation to try to make the industry fairer, given its close ties to the major pubcos. "I wouldn't trust them any more than I would a fox with my chickens," he said.

OCTOBER AGREEMENT

The BBPA came up with the new code, known as the Pub Industry Framework Code of Practice, following an agreement it reached last October with the British Institute of Innkeeping (BII) and the Federation of Licensed Victuallers Associations (FLVA). It is designed to form the basis of the code of practice of each BBPA member. Although member companies do not have to adhere to the BBPA's version of the code verbatim, their code must still be scrutinised and approved by the BII's accreditation body.

Among the main changes is a commitment to help protect those taking on assigned leases. They will be provided with the same level of detailed information available to those taking on a pub directly with pub companies, preventing any potential bear traps.

Meanwhile, the code also seeks to clear up problems with tied agreements on amusement machines. Currently a licensee shares income from tied machines twice, once within the machine tie and again through the overall profit assessment on which its rent is based. The new code will ensure that amusement machine income will not be included in the profit assessment for rents.

In addition to the code, the BBPA has also set up a "cost-effective" rent review scheme, known as PIRRS, through which unhappy tenants and lessees can appeal if they cannot resolve a rent dispute with a pubco.

The code will be a condition of BBPA membership. But this is where some of the strongest objections from other sections of the industry come. Ward told Caterer: "Any pubco can leave the BBPA, so the only way forward is a mandatory code. We know the pubcos are not going to change. In any case, members pay in excess of a six-figure sum to be in the BBPA. The BBPA is a business - they aren't going to turn that down that sort of money by ejecting members for breaking the code]."

It's a view that is echoed by Camra. "The code is undermined by the lack of any serious sanctions for companies failing to abide by it. It appears that where there is a dispute the BII or FLVA will merely pass any complaint on to the offending company and seek to ensure there are no misunderstandings, or personality issues," its spokesman said.

And Steve Corbett of Fair Pint added: "Pub companies have a record of ignoring their existing codes of practice and the lack of real sanctions for this code means that they will be free to ignore this one as well."

BINDING CODE?

Nick Bish, chief executive of the Association of Licensed Multiple Retailers (ALMR) agreed that he wanted to see a legally binding code. But he did acknowledge that the code had made some positive steps. "The transparency is to be welcomed, as is the commitment to recognising the problems with amusement machines," he said.

But Bish said there was a sense that some pubcos might make their code more favourable than the industry norm, while smaller players would feel aggrieved that they had been dragged into the debate and decide to walk away from the BBPA. However, the BBPA said it did not anticipate businesses leaving, adding its members were "collectively signed up to the process".

Then there is the question of the model upon which pub rents are valued, reform of which could have a major impact on the industry. The Royal Institution of Chartered Surveyors is currently pondering the issue, with revised guidance expected later in the year.

Bish added: "We have made considerable progress from where we were but we are waiting to see is what RICS is going to say and how the details of the code translate into individual pubco codes."

Even at that stage, it is difficult to imagine that the pub industry's many trade associations and protest groups will be in total agreement on the outcome.

New code of practice on pub tie agreements published >>

ALMR welcomes legal move to promote competition in pub sector >>

GMB union launches ballot on direct action over beer tie >>

Beer tie row rumbles on >>

By Neil Gerrard

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