Tied beer vote threatens 7,000 jobs in pubs sectors says Punch Taverns

STAFFORDSHIRE pubco Punch Taverns has warned up to 7,000 jobs could be at risk in the pubs sector following a vote in the Commons on tied pubs.

The amendment to the Small Business, Enterprise and Employment Bill, passed by a vote of 284 to 259, plans to introduce a market rent only option for tenants of pub companies with 500 or more pubs, effectively breaking the beer-tie.

However, Burton-upon-Trent pubco Punch Taverns said the move was likely to have serious repercussions for the pubs sector with hundreds of venues facing closure and thousands of jobs lost.

In a statement to the London Stock Exchange, the company cited the Government’s own figures.

It said: “Punch has been at the forefront of improving the support for pub tenants across the sector and we remain committed to a sustainable future for British pubs.  However, the amended Bill (should it proceed through Parliament in its current form to become law) would have significant adverse consequences for Britain’s community pubs.

“The Government’s own research indicated that breaking the tie would be expected to result in between 700 and 1,400 more pubs closing with 3,700 to 7,000 job losses.  Furthermore, we believe that the amendment would be likely to have the effect of reducing pub investment, reducing consumer choice and exposing tenants to higher fixed rents, reduced levels of support and greater risk of failure.”

Punch added that the amendment was also contrary to the Government’s proposals for statutory regulation of the pub sector, which were in June following an extensive public consultation.

“The Government’s proposals did not include a mandatory free-of-tie option for tenants on the basis that it would have been likely to cause a high degree of uncertainty in the industry and would have unnecessarily risked leading to higher levels of pub closures and job losses,” it added.

“Punch’s view is that the amendment would lead to the creation of an unworkable two tier economic market and would be contrary to existing legal contracts and property rights.  It also runs contrary to the OFT’s view when it considered a super-complaint from CAMRA in 2010 and concluded that tied tenants were able to compete effectively and that the commercial interests of pub companies and their tenants were aligned.”

The company said it was currently considering the potential impact of the amended Bill on its business, including the implications for its pub investment program and disposal plans.

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