North East MP welcomes plans for Pubco code of conduct

EASINGTON MP Grahame Morris has welcomed a new statutory code of practice for pub companies that should make tied landlords lives fairer.

The vice chair of the All Party Parliamentary Save the Pub group has since 2010 been campaigning to make it so that all tavern managers working at properties owned by Pubcos are no worse off than free-of-tie licencees.

“The unfair and unsustainable overcharging by the big pub companies must be stopped – and their licensees must be able to take a fair share of pub profit, which of course then means the pub can be viable and the licensee can make a living,” the County Durham politician said.

Currently tied landlords can face a system of “double overcharging” where they have to pay both hugely inflated prices to buy beer from specific suppliers and high rents.

But Mr Morris said that the simplest way for the new code to change that and make it fairer would be by offering tied landlords the option of a “market rent only” agreement, where they pay the Pubco a slightly higher rent – at a level set buy an independent adjudicator – but are free to buy beer from where they want.

The proposed system would run alongside a modified version of the current system where licencees could agree to continue buying more expensive beer through a Pubco, but in exchange for lower rent payments.

“To be clear this would not be abolishing the beer tie,” he said. “What it means very simply is licensees who choose this option would pay the fair monthly market rent to the pub-owning company, who would retain ownership of the pub.

“What this option does is make the tie work as it was always supposed to – which means in return for paying inflated prices to the Pubco for beer, it should follow that tied licensees pay a compensatory lower than market rent.

“This method would achieve the desired result without the need to intervene directly in regulating and policing beer pricing.

“Introducing a market rent only option clearly allows pub owning companies to continue offering competitive tied agreements. This would offer lower than market rents in return for higher product prices and many licensees would chose this option but with the protection of an independently assessed fair market rent and the option to pay that.

“In this way tied options would be fair to both large and small business and transparent in a way that they are currently not.”