British Beer & Pub Association Disappointed by MP’s Plan for Tougher Stance on 'Pubco's'

The BBPA is disappointed by the Government's intention to regulate the business activities of large 'pubcos'. They are concerned that this will mean more 'red tape' for the industry.

Jan 16 2012 --- There is to be an independent inquiry into the regulation of large pub companies (pubcos) in a bid to curb pressure on struggling publicans.

The British Beer & Pub Association is not pleased with the government’s change of heart: “We are disappointed that MPs have supported calls for further red tape for pubs. We have demonstrated that self-regulation is working. Our focus remains in delivering against the recent agreements we have made to enhance the Industry Framework Code, introduce a more effective mediation service and improve support to lessees and tenants. With the number of pub closures falling, further Government red tape for pubs risks choking off recovery – stifling growth and hitting jobs.

“The voluntary approach has enthused pub companies to go far beyond the Framework Code in their own Codes of Practice. What we need is more transparency and low cost ways to complain (PICAS) and better business support for would-be licensees to help them make a success of running a pub in a truly challenging economic climate. If Parliament could concentrate on reducing beer taxation, it will help publicans far more than any calls for a statutory code.”

In November 2011, the British Beer & Pub Association announced extensive reforms to the Pub Industry Framework Code of Practice and resolution procedures. After discussions between the Government and industry partners, the industry agreed binding principles that apply to companies operating tied tenancies and leases, enshrine the Industry Framework Code of Practice in law and provide low cost mediation and conciliation services to tied pub operators.

The debate took place in the House of Commons last Thursday. Suspicions about the governments’ independence in this critical investigation into the regulation of 'pubcos' were raised during the session. It emerged that civil servants charged with preparing the Department for Business, Innovation and Skills (BIS) response copied parts of a document produced by the British Beer and Pub Association wholesale without changing a word, and even leaving in a typo from the original source.

An estimated 700 pubs closed last year amid increased home drinking and evidence that pub companies raised charges to "tied" pubs for rent and beer. In September, the BIS concluded that the industry was incapable of reforming itself and backed legislation to control pub companies.

JD Wetherspoon, the high-street pub company which originally intended to open 50 pubs this year, says it may scale back its 2012 expansion plans in the face of “punitive” tax increases by government.