MPs' pubco vote divides industry

19-Nov-2014 - Last updated on 26-Apr-2021 at 17:06 GMT

Yesterday parliamentary vote will result in the addition of a clause to the Small Business Bill

MPs’ vote to allow ‘tied’ pub landlords to order beer from providers outside their brand is dividing the industry.

The vote, which saw 284 MPs in favour and 269 against the amendment, means a new clause will be added to the Small Business Bill to allow large pub company (pubco) licensees to buy beer on the open market.

While the Campaign for Real Ale (CMRA) hailed a ‘landmark victory’, the British Beer and Pub Association (BBPA) said the change would be ‘hugely damaging’.

Affordable beer

Tim Page, CAMRA chief executive said: "Today’s landmark parliamentary vote helps secure the future of pubs. CAMRA is delighted that, after ten years of our campaigning, MPs have today voted to introduce a market rent only option for licensees tied to the large pub companies – a move that will secure the future of the Great British Pub.

"Allowing over 13,000 pub tenants tied to the large pub companies the option of buying beer on the open market at competitive prices will help keep pubs open and ensure the cost of a pint to consumers remains affordable. The large pub companies will no longer be able to charge their tenants prices up to 60 pence a pint higher than open market prices."

Meanwhile Brigid Simmonds, BBPA chief executive, commented: “This change effectively breaks the ‘beer tie’, which has served Britain’s unique pub industry well for nearly 400 years. It would hugely damage investment, jobs, and results in 1,400 more pubs closing, with 7,000 job losses – as the government’s own research shows.

“There are serious legal and competition issues which must be faced, as it rides roughshod over what are previously agreed contracts, and creates an unworkable, two-tier market. I hope Parliament will rethink as the bill continues its progress.

Opposing views

The division reflects the difference between the two bodies’ pub closure statistics: Figures published by the CGA – CAMRA Pub Tracker in August revealed 31 venues were closing every week, but the BBPA’s own research points to only 13 weekly closures.

Upon releasing its latest research earlier this week, just in time to vouch against statutory intervention, the BBPA pointed out that leased and tenanted pubs among its members had closed at a rate of five per week in the year to September 2014 – and believed this number to be around 13 for the sector as a whole.

The figure matched analysis by the Valuation Office Agency ratings database, which can be found below.