Proposed pubs code under fire

Suggested measures for reform “misguided”, says Heineken

By Gillian McKenzie

MANY of the UK government’s proposals to reform the pub sector are “misguided” and could bring “unintended consequences” for the wider industry, brewing giant Heineken has claimed.

Responding to the consultation on the proposed statutory code of practice for pubcos, the beer and cider firm, which owns pubco Star Pubs & Bars, said the proposals represent a “worrying lack of ambition” for British pubs and “fail to recognise or tackle” the challenges facing the pub industry.
Measures outlined in the proposed code of practice, which would apply to pubcos with more than 500 outlets, include that they charge “fair rents and beer prices”, treat tenants “fairly and lawfully” and that “tied pubs are no worse off than free-of-tie pubs”; it also proposes the appointment of an independent adjudicator which would have the power to impose fines.
The proposed measures would currently only apply to pubs in England and Wales but campaigners for pubco reform have called on the Scottish Government to ensure tenants north of the border are included.
Heineken said if the statutory code goes ahead it could restrict investment in pubs and prompt many pub companies to adopt a “purely commercial” property relationship with tenants. It described evidence presented by the government as “weak and misleading”, saying it “does not justify the extent of the proposed intervention”.
Claiming that self-regulation is working, Heineken suggested a number of alternative measures the government could implement to help growth in the industry, including reviewing business rates and supporting a reduction in VAT for food served in pubs.
Lawson Mountstevens, managing director on-trade at Heineken, said: “Despite good intentions, many of the government’s proposals to reform the pub sector are misguided and there will likely be unintended consequences for pubs across the country if fully implemented.”
The Scottish Beer & Pub Association said a statutory code would add “very significant costs” to the pub sector and could have “hugely damaging” consequences in terms of pub closures, business failure and reduced consumer choice.
“We approximate that there are currently 630 pubs out of the estimated 5000 pubs in Scotland which are owned by the three tenanted pub companies that would be directly affected by the proposals,” it said in its response.
“This is a significantly lower number and proportion of the industry than the proposed measures across the rest of the UK, suggesting that these measures would be a wholly disproportionate response to the scale of any issue which exists in Scotland.”
However, the Scottish Licensed Trade Association backed the introduction of a statutory code in principle, as long as it covers Scottish tenants.
“It seems inconceivable that, should a statutory code of practice be introduced by the Westminster government, a discriminatory ‘two-tier’ level of protection and recourse will be in force whereby Scottish-based tenants of pubcos, the headquarters of which for the overwhelming majority are based in England, will be excluded from the jurisdiction of this proposed statutory code of practice,” it said in its response.