Enterprise Inns brands tied pub vote an "unwelcome development"

THE defeat of the Government in a Commons vote giving tied publicans more control on where to source their beer supplies has been branded an “unwelcome development” by a West Midlands pubco.

MPs yesterday voted 284 to 259 in favour of an amendment to the Small Business, Enterprise & Employment Bill which allows landlords an independent rent review and the right to buy their beer on the open market.

However, Solihull-based Enterprise Inns said the move threatened to have serious unintended consequences for publicans and the industry at large.

Simon Townsend, CEO of Enterprise Inns, said today: “The Government completed a thorough and extensive review of how best to enhance protection for tied tenants. As a result, it rejected the ‘market rent only’ option as damaging to pubs, communities and the wider industry.

“Independent economic research, commissioned by the Government, found that a ‘market rent only’ option would lead to widespread pub closures, significant job losses and reduced investment in the sector. This amendment is a disproportionate response which proposes fundamental change that is wholly contrary to the findings of the consultation, from which the Bill was drawn up.”

He said the company continued to believe the tie offered the best operating model for the vast majority of the firm’s publicans and, stressed that as Enterprise had said in its preliminary results yesterday, the business continued to take a flexible approach to its entire lease and tenancy agreements and the proactive management of its wider property portfolio.

“In light of yesterday’s vote we will continue to assess all options to safeguard the interests of both our publicans and shareholders. In the meantime we will monitor the situation closely and await the Government’s response to this unwelcome development,” he added.

However, not everyone was opposed to the move.

Real ale lobby group CAMRA said the vote offered a better deal to drinkers and publicans alike by securing the future of thousands of pubs around the country.

Tim Page, CAMRA Chief Executive said: “CAMRA is delighted that, after ten years of our campaigning, MPs have voted to introduce a market rent only option for licensees tied to the large pub companies – a move that will secure the future of the Great British Pub.

“The (vote) will empower pubco licensees to choose between a tied agreement and a market rent only agreement that will allow them to buy beer on the open market. Allowing over 13,000 pub tenants tied to the large pub companies the option of buying beer on the open market at competitive prices will help keep pubs open and ensure the cost of a pint to consumers remains affordable. The large pub companies will no longer be able to charge their tenants prices up to 60p a pint higher than open market prices.

“This simple choice should spell the end of pubco licensees being forced out of business through high rents and tied product prices.”

CAMRA is now urging the Government to accept the outcome of the vote.