The Government's failure to stop the big pub companies (PubCos) from ripping off their ‘tied' tenants through overcharging for beer and restricting access to local ales is having a disastrous impact on the pub trade.

Speaking in a debate on PubCos in Parliament today (1), Brighton Pavilion MP Caroline Lucas said it was ‘a scandal' that just a handful of big companies had been allowed to dominate the pub market.

Currently, tenants who are 'tied' to the PubCos can only buy a limited range of beer at inflated prices - a bad deal for consumers and for many lesees, threatening hundreds of successful and popular local pubs.

PubCos tell lesees in negotiations that they can choose to be free of tied options, but they often fail to mention that they have to pay a premium to qualify for this (2).

Caroline said:

"Pubs are central to our communities, and play a vital role in this city's economy and tourist industry.

"But the failure of the Government to call time on the damaging practices of the PubCos which dominate the market is putting all this at risk.

"The landlord of the Greys in Hanover tells me that his is the only pub that hasn't closed and re-opened in the last nine years.

"The London Unity has had three owners in two years, while the Geese has changed hands four times in six years.

"In all of these, the ‘tied' scheme was a significant factor. This means ruined livelihoods for the individual landlords and their families. It also means instability for our pubs and for our local economy."

Caroline continued:

"Business Secretary Vince Cable promised action to help save our pubs if the industry didn't get its own house in order. 

"But neither the industry nor the Secretary of State has delivered.

"The tied pubs in my constituency now want to know if and when the Business Secretary is going to keep his promise.

"We must not allow big business to continue to wield such unfair power over pub lesees, and must make possible for local brewers to sell their beers to local pubs.

"The Government's response has failed to address the key issues of providing lessees with a genuine option that is free of tie and guest beer, and so will not rebalance the relationship between struggling licensees and large pub companies."

She concluded:

"I fully support The Campaign for Real Ale's championing of well run community pubs. 

"An effective approach to reduce alcohol-related harm must involve support for good community pubs which provide a safe and responsible place for people to drink.

"Our community pubs should also be supported by a policy of minimum pricing of alcohol in supermarkets to begin to seriously tackle the problems caused for our pub trade (and indeed for society) by the off-sale of cheap, low quality alcohol.

ENDS

Notes

1) Caroline has also co-sponsored a Motion calling for a ‘Statutory code of practice for pub companies:

That this House believes that the Department for Business, Innovation and Skills' proposals for reform of the pub industry fall short of the undertaking given to the Business, Innovation and Skills Committee in July 2010 and that only a statutory code of practice which includes a free-of-tie option with an open market rent review and an independent adjudicator will resolve the contractual problems between the pub companies and their lessees; and calls on the Government to commission a review of self-regulation of the pub industry in the Autumn of 2012 to be conducted by an independent body approved by the Business, Innovation and Skills Committee.

2) On wines and spirits, the charge is between £4000 and £5000 extra per year. It is a similar amount for bottled beers.  A typical annual rent for a pub tenant in Brighton is £25,000 a year.