Time For Change But Is The Minister For Consumer Affairs Listening?

Dear Jennie Willott MP 

I’ve been involved in the pub trade for almost 30 years. I have successfully operated a number of restaurant, bar and pub groups. I’m a founder member of the Fair Pint Campaign, a current group member of the Independent Pub Confederation (IPC) and a steering group member of the Fair Deal For Your Local Campaign.

Along with many others, I read with interest your recent comments in the House where you suggest that any Government intervention in the pub sector should be “proportionate and targeted”. Whilst I applaud your comments, I’m concerned that any well meaning Government solution to the damaging pubco tied supply problem, should it ever materialise, not fall under the ‘disproportionate’ influence of pubco lobbying or misleading propaganda brought about by the BBPA and the pubco sponsored beer group.

The pubco ‘tied’ model has severely damaged the pub sector of that there can be absolutely no doubt. The sector does not need a series of over-geared and very secondary property companies, aided by some very wealthy family brewers, controlling the supply of beer, fixing prices and manipulating valuations and rent reviews. Publicans and consumers who care very much about pubs are keen to see changes that will loosen the grip of cartel like influences that care very little indeed about the future of the cultural icon that is the British pub and more about how much they can squeeze from the sector whilst Government’s back is turned.

It is apparent that the pubcos are suggesting to anyone who will listen that somehow they have put their house in order and that self-regulation is working. Of course, viewed through the eyes of most tenants and consumers, this is wholly untrue. For every publican that manages to gain a ‘very public’, modest hand-out via PICAS and PIRRS, many thousands more fall by the wayside, go bust, never to be heard of again. It seems that the pubcos and the BBPA are running around Parliament - with acolytes in support - trying to make it look like self-regulation is working. As plausible as their PR sponsored argument may sound, beer is still being sold to their tenants at double the price, beer volumes continue to decline, rents are proportionally out of kilter with the free trade and pubs keep on closing.

Any code of practice, whether self-regulated or statutory, that doesn’t address tied tenant’s risk and reward is a meaningless distraction that allows pubco abuse to continue under the self-proclaimed banner of “we’ve changed our ways”. The truth of course is that they haven’t and self-regulation isn’t working. Foxes in chicken coops don’t regulate themselves. Pubcos charging up to twice as much for beer and abusing the archaic beer tie arrangement don’t change either.

We are of course seeing a craft beer resurgence in the sector with supermarkets, good quality innovative and exciting beers from small micro brewers - who have no chance of making pubco product lists - and changing tastes amongst young people creating much needed change and pubs and publicans have to respond to that. At present the pub industry, along with its true entrepreneurial flair, is strangled by pubco greed, which, in a competitive market would otherwise blossom. The beer tie is anachronistic and is in urgent need of reform. We need a free, fair and normal consumer driven market place where producers of goods will find consumers and where retailers can respond effectively to new challenges and demands.  

There has much been said recently about the serious issues in the pub sector and hopefully Ministers and officials have listened carefully to those concerns. The answer is the Market Rent Only option. This simple legal device, easily put in place via a statutory code, will instil competition and health into the market where for far too long it has been absent. It will put some power back in the hands of the tenants where it needs to be. There is nothing in the Market Rent Only option that puts pubcos out of business unless their business is based on overcharging which the pubcos claim it is not. Market Rent Only is not abolition of the beer tie, it simply uses open market forces to regulate and ensures all agreements are fair and reasonable.

In the pub sector, we’ve witnessed the devastating influence of the pubcos and the awful BBPA, lobbying for a watered down Government solution with ‘bought and paid for’ trade groups such as SIBA and the BII. All this effort is to stave off the risk that existing legislation - twisted carefully in favour of tenanted pub owning companies over many years - could be subject to change. The right change, if it could happen – a Market Rent Only option - would be all for the good as far as pubs and consumers are concerned but not perhaps for pubcos and the brewers that copy them.

The problem for tied tenants is that dealing with a pubco is like handing over your lunch money to the school bully every day. It’s a brutal cycle. The only supportable position is a Market Rent Only option and anything less than this allows the bullying to continue, forcing more pubs to close and many more lives destroyed in the process. I hope you will agree.

Very Best Regards

Steve Corbett