Vince Cable calls time on unfair practices in pub industry

http://www.guardian.co.uk/lifeandstyle/2013/jan/08/vince-cable-pub-industry-code

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The battle to keep the ailing British pub alive has been given a boost by the business secretary, Vince Cable, who has announced plans for an independent adjudicator to address unfair practices in the industry.

Cable also said he would introduce a statutory code governing the relationship between pub companies and publicans. The code will be enforceable by the new adjudicator.

A long-running campaign to end the exploitation of pub landlords has been led in parliament by the Liberal Democrat MP Greg Mulholland and supported by the business select committee. A Commons debate is due on Wednesday.

The new code will cover fair practices including rents and the prices publicans pay for beer. The adjudicator will have the power to investigate and deal with disputes between pub companies and publicans, and in some cases to impose fines.

There have been repeated allegations that pubcos abuse the beer tie, the means by which publicans sell particular types of beer. The code will enshrine the fundamental principle that a tied licensee should be no worse off than a free-of-tie-licensee, which will ensure a level playing field.

Cable said: "There is some real hardship in the pubs sector, with many pubs going to the wall as publicans struggle to survive on tiny margins. Some of this is due to pubcos exploiting and squeezing their tenants by unfair practices and a focus on short-term profits.

The Labour government oversaw three select committee reviews into these problems but only acknowledged the need for action in their last few months in office. Last year we gave the pubcos one last chance to change their behaviour but it is clear that the self-regulation approach was not enough. A change in the law is now needed.

"I hope these measures mean publicans are given a fairer chance at running their pub, which in turn will help them grow their businesses instead of losing them."

A formal consultation on the proposals will begin in the spring. It is likely to last three months, and sources in the business department said they expected legislation this year or in 2014.

A government source said: "We will consult on this but there is no question that there will be legislation. The beer industry has nearly had two years to make progress on the voluntary code, and it is clear they are not doing enough. There have been four select committee reports on this so the industry has had plenty of notice to put their house in order."

Government sources acknowledged that many pub closures were partly due to beer taxes, changes in drinking culture and the smoking ban, but said the changes would help publicans.

Mulholland, chairman of the all-party save the pub group, said: "I am delighted that Vince Cable and the government have now decided that a statutory code of practice is needed that will at last enshrine in law that the tied licensee is not worse off than the free-of-tie licensee. This is great news for pubs, pubco publicans and customers and is huge boost in terms of the coalition government delivering the prime minister's promise to be a pro-pub government.

"It is a great credit to Vince and his team to have reviewed the situation a year on, as parliament requested, and to have seen clearly that yet again the pubcos and their trade association, the British Beer and Pub Association, have carried on in the same vein and attempted to use window dressing and delay tactics to seek to avoid real and much needed reform."