Inquiry into pub companies - call for evidence
8 June 2011
The inquiry will examine the recommendations made by our predecessor Committee in March 2010. Of particular interest to us is whether the problems raised in the Parliamentary inquiries of 2004, 2009 and 2010 have been resolved or whether statutory regulation is required.
Written evidence in connection with the inquiry should be sent to the Committee by Monday 20 June 2011. Please note: written evidence should be no more than 2,000 words (not 3,000 words as stated in the Guide to submitting written evidence link below).
- Guide to submitting written evidence
- Inquiry: Pub Companies
- Business, Innovation and Skills Committee
Topics
Topics to be considered are:
- If the BBPA and IPC are now in dialogue and if so how this is progressing
- Whether the Pub Companies' individual Codes of Practice are robust enough and whether the major pub companies have built upon the de-minimis requirements of the BBPA's Framework Code
- If the Codes of Practice are being complied with
- How the BII is policing the codes and whether this is effective
- The enforceability of the codes
- If AWP machines are now being treated more fairly and tenants are being given a genuinely free of tie option
- The treatment of flow monitoring equipment
- The advice being provided by BBPA to prospective publicans
- The effectiveness of the new RICS guidance on pub rental valuations and whether it provides clarity on the principle that a tied tenant should be no worse off than a free of tie tenant by defining what constitutes a countervailing benefit
- The creation of an industry benchmarking survey
- The availability and effectiveness of complaints procedures and an independent disputes mechanism
- The availability of genuine free of tie options ie an open market rent review under RICS new guidelines, ability to buy beer from any source
- The guidance from BII on the type of pub leases available and what the options mean in reality to prospective lessees. This includes free of tie, tied pricing and discounts as well as the business support countervailing benefits available
Adrian Bailey MP, Chair of the Business Innovation and Skills Committee said:
"Our predecessor Committee made clear that this was the last chance for the pub companies to 'get their house in order'. Our inquiry intends to find out if they have.
The British pub is an important institution which not only provides a social meeting place but also plays an important cohesive function in many communities. We do not want to see any more pubs closing unnecessarily."
Previous Committee Reports
- Pub Companies, Trade and Industry Committee, Second Report of Session 2004-05, HC 128
- Pub Companies, Business and Enterprise Committee, Seventh Report of Session 2008-09, HC 26
- Pub Companies: follow-up, Business, Innovation and Skills Committee, Fifth Report of Session 2009-10, HC 138
- Pub Companies: follow-up: Government Response to the Committee’s Fifth Report of Session 2009-10, Business Innovation and Skills Committee, Eighth Report of Session 2009-10, HC 503
We received the Government Response on 19 March 2010 alongside a paper by John Healey MP, the then Pubs Minister, outlining the Labour Government's Community Pubs Strategy. The Response and Strategy endorsed the recommendations made in our reports and went further saying:
"Government gives the industry until June 2011 to improve. If the Business, Innovation and Skills Committee concludes by then that the Code is not working as well as it should we will consult on putting the Code on a statutory basis with effective enforcement. The Code of Practice should also incorporate a beer/non-beer tie option for tenants with a commitment that the Government will act if the industry does not. In addition the industry should introduce voluntary provision for tenants to offer a guest beer outside the traditional beer tie as part of the code with Government action to introduce an order if industry fails to act."
On 20 July 2010, following the General Election, we questioned the recently appointed Secretary of State, Rt Hon Vince Cable whether the Coalition Government would keep to the previous Government's undertakings regarding our Pub Companies' Report recommendations:
Mr Binley: [...] You will know that we recommended that we should re-look at the question of code of practice in the industry if we felt the pub companies were not acting properly within that voluntary code, and the previous Government accepted that they would take action if our findings were that the pub companies were not acting properly within that code. Can I ask if you will confirm that the present Government would continue that policy?
Vince Cable: I can confirm that.
Mr Binley: I am delighted. Secondly, your department said that it would actively monitor pub companies in this respect. Can you tell me if that is happening and give me any idea of how you feel that monitoring is going? Is it going favourably or are you concerned?
Vince Cable: The main monitoring I do is with my local pubs.
Mr Binley: I do the same.
Vince Cable: They tell me they are very frustrated with the tie arrangements and they do want reform but, as you know because of your Committee's recommendations, they are on probation at the moment.
Mr Binley: They are indeed.
Vince Cable: I think the commitment is to give them until 11 June and if they have not delivered a more satisfactory arrangement then there will have to be legislative action.
Mr Binley: Thank you very much for that answer.