Small business groups welcome ‘historic’ pubs vote

SMALL business groups and campaigners have welcomed a House of Commons vote that will limit the control that parent companies can exercise over pubs.

MPs voted 284 to 259 in favour of an amendment allowing landlords an independent rent review and to buy their beer on the open market.

So-called “tied pubs” are required to buy supplies – often at high prices – from the companies that own the pubs.

Campaigners said the “historic” vote would help “secure the future of the Great British pub”.

The Federation of Small Businesses said it was “a historic day for tied publicans who look forward to a more open and competitive marketplace”.

Richard Gregg, regional chairman for Manchester & North Cheshire at the FSB said: “Research has shown almost 60% of landlords in tied tenancies earn less than the national minimum wage equivalent salary of £10,000 a year. Publicans will now be allowed to request a rent review as well as being allowed to buy beer on the open market, effectively meaning landlords can call time on time on what has been an appalling situation for them.

“The other winners are local breweries, and the wider regional supply chain. The freedom to stock a wider range of beers will provide a boost to local economies while giving consumers greater choice.”

Tim Page, chief executive of the Campaign for Real Ale, said the move “will secure the future of the Great British pub”.

The amendment to the Small Business, Enterprise and Employment Bill was put forward by Lib Dem MP Greg Mulholland.

Mr Mulholland, the chairman of the all-party Parliamentary Save the Pub group, described the “tie” arrangement made between a pub and its owner as an “archaic” and “extraordinary” system.

It is thought to be the government’s first defeat on one of its own bills since the 2010 election.

Ministers want to create a pubs code, aimed at helping pub landlords struggling to pay rent or beer costs.

It includes the right to request a rent review after five years.

But campaigners wanted the automatic right for pub landlords to exchange their tenancy for an independently-assessed market rent without any “tie”.

The vote was not welcomed by all though. The British Beer and Pub Association said the outcome was “hugely damaging”.

Chief executive Brigid Simmonds said: “This change effectively breaks the ‘beer tie’, which has served Britain’s unique pub industry well for nearly 400 years.”

Simon Townsend, chief executive of Enterprise Inns warned the amendment “
threatens to have serious unintended consequences for publicans and the industry at large”.

He said: “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.

“We continue to believe the tie offers the best operating model for the vast majority of our publicans…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.”