Opinion: We can revolutionise the UK pub industry

The Vine Beer FestivalIf the Lib Dems are sincere about the “fairer society” as part of our slogan or elevator pitch or whatever you want to call it, then there is something tangible we can deliver in this current parliament that would have a direct and profound effect on many people’s lives.

We are in the midst of a major offensive against the insidious practices of the large national pub companies (pubcos), with CAMRA, politicians and other consumer groups petitioning the government for wide reaching legislation that would revolutionise the pub industry in the UK for the first time for decades.

We need this to make it into the Queen’s Speech.

I recently interviewed a York licencee, who is the leaseholder of a tied house owned by Punch Taverns, but also, and very unusually, owns 3 pubs of his own, which are free of tie. This gives him a unique and authoritative insight into this subject

It has attracted national coverage and you can listen to the very candid and highly revealing interview with him here , but be assured my interviewee left me in doubt as to the gravity of the situation stating that “Regulating the pubco industry is desperately needed”

As well as paying a far higher rent to Punch Taverns than his monthly mortgage on the pubs he owns, he can buy beer up to 80% cheaper on the free market than that he has to buy direct from Punch also.

These punitive practices by the large pubcos such as Punch and Enterprise ensure that landlords of their pubs hardly make ends meet and certainly don’t earn an income commensurate with their tireless endeavours.

A recent CAMRA survey revealed the shocking truth that more than 84 per cent of landlords tied to buying beer from the pubCos earn less than £15,000 per year. That’s £11,500 less than the average UK wage.

Little wonder that, despite the renaissance of real ale and UK brewing, the UK pub industry is still on its knees with 28 premises still closing for good each week.

This can change if Vince Cable wins the battle to include far-reaching pub company legislation in the Queens Speech that would revolutionise the industry.

If the law is changed to dismantle the unfair business practices of the national pubcos, it would ensure a level playing field for tied licensees, including fair market rents and equitable beer prices. It would ensure a fair wage for many thousands of people that would be commensurate with their abilities.

Should Vince be successful, do not underestimate the effect this could have on the battered image of the Lib Dems who could rightly claim to be having a massively positive influence on the workplace. Prominent Lib Dems such as Greg Mulholland and Gareth Epps have been working for years to make this a reality so don’t for a minute think we are opportunistic johnny-come-lately’s. We want this to happen because it is right thing to do.

We need this to make it into the Queen’s Speech – please do whatever you can to put pressure on your local MP or government minister to ensure it happens.

* Nick Love is a freelance writer, a member of The British Guild of Beer Writers and a member of York Liberal Democrats.

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  • I do not drink alcohol — but I suppose anything that makes it easier for Liberal Democrats to drown their sorrows is sorely needed whilst Clegg remains leader.

    The Pubcos are not exactly a shining example of capitalism in practice so the CAMRA campaign will I hope achieve a change.

  • So why do people rent a pub from a pubco instead of opening a free of tie one when there are so many empty properties on high streets? Obviously the pubcos think it is a good deal for the pubcos, I am interested in why the tenants sign up.

    I can think of only 2 explanations.

    a) the councils wouldn’t allow new pubs to open, so they have effectively awarded a monopoly to the pubcos which own the existing ones.

    b) the pubcos are effectively selling a turnkey pub to people with money from elsewhere who want to live the dream of being the landlord of a pub.

    If the situation is b) then that is a legitimate service. If the situation is a) then the problem lies with local councillors who think they have the right to decide about their neighbours’ lifestyles, so legislation needs to be aimed there. If there is an explanation c) then the people asking for legislation need to explain what it is.

  • Tom Snowdon 2nd Jun '14 - 1:07pm

    @ Richard S
    Perhaps explanation c) is that some people want to run a pub but don’t have the cash behind them to buy a pub, so they have to rent from a pubco.

  • Matt (Bristol) 2nd Jun '14 - 3:05pm

    Explanation d) could be that the pubcos are not being honest or over-encouraging naievety in their coustomer in explaining the running costs of the business and its likelihood of turning a profit?

  • Richard S
    Why do people rent from Pubcos?

    There is no logic to making an unwise choice but plenty of people do.

    – “Why do people accept zero hours jobs which pay less than the minimum wage, when they would be better off with an alllotment growing their own vegetables f??”

    “Why do people buy cars and mainly use them for the weekly shop, when they could order on line and have their groceries delivered to the door?”

    “Why do people buy electricity when there is a company that will fit free solar panels to their roof?”

  • David Allen 2nd Jun '14 - 6:40pm

    “We can revolutionise the pub industry”

    Er, mightn’t recent events suggest a certain inability to organise an alcoholic celebration in a beer manufacturing plant….

  • Kevin Colwill 2nd Jun '14 - 8:25pm

    I read somewhere that the clergy (all faiths) were the most happy with in their working lives and landlords/pub managers the least happy.
    It seems the gap between the ideal and the reality of running a pub catches too many out. As they say, many are called but few are chosen.

  • A simple reform that could be easily enacted: A ‘pub’occupying a site that has been continuously used as a ‘pub’ for at least 40 years can only be closed if the ‘pub’ cannot be sold at auction (no reserve) to a party (including the existing tenant landlord) who are wanting to run it as a ‘pub’, with the original owner maintaining a share in the property that reflects the difference between final auction price and valuation for redevelopment – which subsequent owners can buy out .

    The purpose of this would be two fold: firstly it helps to ensure that existing established pub sites are to some degree protected from PubCo owners who destroy pub sites by redeveloping them into homes or sell them with the constraint that the site cannot be used as a ‘pub’.

    Now we have some protection to traditional pub sites in our towns and villages and both increased the cost of exit and reduced the cost of entry into the market, I suspect we might begin to see some change in the behaviour of the PubCo’s.

  • Peter Watson 3rd Jun '14 - 1:59pm

    Not my joke, sadly, but does this make Lib Dems “The Party of Inn”?

    I’ll get my coat.

  • Roland’s point is interesting. If someone still has a property interest (in terms of the non-competition clause) in a property after they have sold it then maybe they should have to pay business rates on it.

    c) why not rent property from someone else? Why not transfer to a non-tied property when there are literally millions of buildings in the UK? Are you sure this doesn’t come back to licensing/planning issues?

    d) so how is this different from anyone else starting a business working out the costs involved and whether or not the business model works? Everyone offering services to businesses tries to market them well, in B2B isn’t it up to the client to decide if they are worth paying for? What right is there to be a businessperson except the right you create for yourself by devising and operating a business model that works?

  • @Richard S – Good points. I think one of the big reasons why the PubCo’s can get away with some of their business practises is because it is difficult and expensive to open a new pub with in a competitive distance (ie. next door) to an existing pub. Also a new pub (as opposed to a bar/”watering hole”) does have a challenge competing against a 200 year old pub…

  • Looking at the summary of the proposed new statutory code for pub tenancies ( http://www.bbc.co.uk/news/business-27675991 ) I can’t see anything revolutionary and doubt there is anything significant given the statement “The Department for Business, Innovation and Skills said it hoped that the new proposals would help tenants get fairer rent assessments.”

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