Independent View: two cheers for Vince

Landlords and punters across the country should be raising a glass to Vince Cable today after he announced new rules for pub companies (or pubcos) which will help local publicans in these difficult economic times.

His plans include the introduction of an independent adjudicator and a new statutory code for the industry – something I argued for in this IPPR report: Tied Down.

Pubs are an important part of the community – they’re a meeting place for family and friends and host meetings of local clubs and associations, promoting local charities and events. But they’ve faced serious demise with 16 pubs currently closing every week.

There is no one single reason for this – there are many (supermarket price competition, the recession, changing tastes and lifestyles). But the commercial structure of the industry is an important factor. The pub sector is dominated by the large pubcos and very many publicans operate under what is called a tied lease arrangement. This means they have to buy all their beer from the pubco that owns their pub at a list price and cannot buy it wholesale where it can often be bought cheaper at a discount. This considerably limits these publicans flexibility in what are very difficult times.

IPPR’s study found that publicans tied to a pubco are unlikely to make the same levels of profit as those that are not. Nearly half (46 per cent) earn less than £15,000 a year compared to just 22 per cent of independent publicans. They are more likely to be under financial pressure – almost three in five (57 per cent) said they were struggling financially compared to four in ten (43 per cent) of independent landlords. Being tied to a pub company was seen as a contributing factor to the financial hardship for the majority of these pubs (88%). Importantly few publicans thought that the revised voluntary code of practice introduced by the industry had made any difference.

Two cheers therefore for Vince Cable in announcing a stronger statutory code and an independent adjudicator, which will give publicans much greater power in their negotiations with the pubcos. In particular the new overarching ‘fair dealing’ provision is a significant reform. It would have been three cheers if he had gone further and given the publican the right to request a non tied lease. Nevertheless this represents a very welcome step towards resolving the crisis facing our pub industry.

* Rick Muir is Associate Director of IPPR

Read more by or more about , , or .
This entry was posted in News and The Independent View.
Bookmark the web address for this page or use the short url http://ldv.org.uk/32590 for Twitter and emails.

2 Comments

  • John Heyworth 12th Jan '13 - 10:51am

    Well its a start….all drinkers agree that something has to be done to stop the pub co’s strangling the life out of the great British boozer. However as 2Real Ale Up North” points out in its recent article (http://realaleupnorth.blogspot.co.uk/#http://realaleupnorth.blogspot.com/2013/01/many-questions-to-be-asked-of-statutory.html) why has the threshold on being a pubco been set at 500? This figure will only affect the big six companys and whats to stop them from breaking their businesses into several smaler regional sub companies to avoid the rules. I have writen to Jo Swinson ,the minister responsable to seek clarification and assurances and await her response with interest.
    But as I said at the begining its a start at least.

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

If you are a member of the party, you can have the Lib Dem Logo appear next to your comments to show this. You must be registered for our forum and can then login on this public site with the same username and password.

Your email is never published. Required fields are marked *

*
*
Please complete the name of this site, Liberal Democrat ...?




Recent Comments

  • User AvatarSara Scarlett 26th Oct - 1:47am
    I have to admit I don't agree with the grounds on which they were protesting. Just seemed like a bunch of vague, unhappy lefties being...
  • User AvatarSara Scarlett 26th Oct - 1:23am
    Stephen [Tall], Some good points. I'm not entirely convinced by 6. Although I do see it's merits. I'd like to see the devolution of power...
  • User AvatarCharlie 26th Oct - 1:07am
    Glenn From my time at university and discussion with many charity /ngo workers. An example is golden rice which through genetic modification has much greater...
  • User AvatarSarah Noble 25th Oct - 11:24pm
    Callum: mind you, that would mean that a) the SNP would have to drop their policy of abstention on English matters and more importantly, b)...
  • User AvatarCaron Lindsay 25th Oct - 11:21pm
    I think it's fair to say that I am not a fan of the Labour Party. One of their first acts in government was to...
  • User AvatarStevan Rose 25th Oct - 11:18pm
    Since only the already relatively decentralised matters of education and NHS gained majority support amongst members of the party most in favour of localism, does...