PUBS FACE BRIGHTER FUTURE SAYS LUFF
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PUBS FACE BRIGHTER FUTURE SAYS LUFF

Pubs have a brighter future thanks to the work of the Business, innovation and Skills committee. That’s the view of the Chairman of the committee, Mid Worcestershire MP Peter Luff.
In a committee report published today (Pub companies: follow-up: Government Response to the Committee's Fifth Report of Session 2009-10), the committee welcomes the government’s acceptance of all its principal conclusions and recommendations about the relationship between pub companies and their tenants or lessees.

The committee’s report is the third on pub companies in less than a year and deals with the complex and controversial issues deriving from the so-called “tied pub” model in which publicans lease or rent their pub from a company for a lower than full market rent in exchange for undertaking to buy all their products from the company – often at a higher price than a “free house” will pay for the same things.
In its report, the committee concludes:

“We see the Government's Response to our two Reports as a vote of confidence in the select committee system. More importantly, we believe its Response is very likely to rebalance the relationship between pub companies and lessees in exactly the way we believed was necessary. We hope the industry will ensure the effectiveness of the steps it is taking voluntarily—if not the Government is clearly committed to act.”

The committee also says,

“We are extremely pleased that the Government has, as part of its wider strategy on pubs, wholeheartedly endorsed the recommendations contained in our Report. Indeed, we see its effective adoption of all of our recommendations, including:
• the future of the tie;
• the use of restrictive covenants; and
• the accuracy of flow monitoring equipment,
as a vindication of our hard work on this issue over the past two years—work which has been carried out in the face of vociferous and, on occasion, unacceptable criticism. We are particularly pleased that the Government has retained the option of a reference to the Competition Commission.

“Our most recent Report set a June 2011 deadline for the industry—a year after the codes are due to be implemented—to prove that it has delivered on its proposals for reform and to demonstrate that those reforms are working effectively. That deadline has now also been taken up by the Government. In its Response the Government makes the following commitment:

If the Business, Innovation and Skills Committee concludes by then that the code is not working as well as it should we will consult on putting the code on a statutory basis with effective enforcement.

“We are grateful to the Government for its acknowledgement of the central role that we have played in driving forward reform of the industry. This commitment sends to the pub industry an unambiguous message that, should our successor Committee not be satisfied with the industry's measures in 2011, the Government will not hesitate to intervene.”

ENDS


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