Mulholland and Heineken meet to discuss market rent only option

Greg Mulholland MP recently met with Heineken following the Fair Deal for Your Local campaign victory to pass New Clause 2 into the Small Business Bill.

Now known as Clause 42 of the Part 4 of the Bill, it included allowing brewers the right to continue to sell their beer in their own pubs.

Mulholland met with David Forde, Managing Director of Heineken UK, and Jeremy Beadles, Corporate Relations Director.

Commenting, Greg Mulholland, Chair of the Parliamentary Save the Pub Group and Coordinator of the Fair Deal for Your Local campaign, said: 

“It was a useful meeting with HEINEKEN discussing the Small Business Bill and the market rent only option. HEINEKEN’s particular concern was their right as brewers to continue to sell their own beer in their own pubs.

“I made clear that it has never been the intention of the Fair Deal for Your Local campaign to prevent brewers selling their own beers in their own pubs which is precisely why I included the part of the clause that allows them to do so, even with the market rent only option in place. I made it clear to HEINEKEN that I and we are willing to work with them and look forward to continuing discussions about this.”

Jeremy Beadles, Corporate Relations Director, HEINEKEN UK said:

“Greg Mulholland, on behalf of the Fair Deal for Your Local campaign, provided welcome clarity that it is not the intention of the Bill and Clause 42 to stop brewers being able to sell their beers in their own pubs.  We have agreed to work together to seek to ensure that this important principle is included in the legislation.”

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MPs join award winning brewer to toast historic vote for pubs with Fair Deal Victory Ale!

 Stout Mary_PRINT

MPs joined Greg Mulholland MP, Coordinator of the successful Fair Deal for Your Local campaign in the Strangers’ Bar of the House of Commons and award winning microbrewer Ilkley Brewery to toast the historic vote, when pro-pub MPs triumphed by introducing the Market Rent Only option for tenants of the large pub owning companies.

 Joining Greg and Luke Raven from Ilkley Brewery were MPs from all parties, including Chair of the BIS Select Committee, Adrian Bailey MP and leading campaigns from the Fair Deal for Your Local campaign, organisations including CAMRA, Fair Pint, Licensees Supporting Licensees, Unite for Licensees, Justice for Licensees and Punch Tenant Network.

 The first pint of Fair Deal Victory Golden Ale was pulled by Greg and then MPs and campaigners joined the toast, with the beer having been very kindly supplied by Ilkley Brewery, the multi-award winning craft brewery in Ilkley Yorkshire, set up in 2009. The commons vote on the 18th November will mean much better and fairer access to pubs for smaller brewers like Ilkley, a member of SIBA (the Society of Independent Brewers Association) and will lead to greater choice of beer for publicans and consumers alike so as well as being a big help to pubs is also a huge boost for the UK’s burgeoning microbrewers – many of whom have been celebrating the historic vote.

Luke Raven and Greg Mulholland MP

Luke Raven and Greg Mulholland MP

 Ilkley brewery kindly provided a cask of ‘Fair Deal Victory Golden Ale’ to assist with the celebrations which it is reported as dry in record time in the Strangers Bar. Luke Raven from Ilkley brewery poured pints with MP’s who supported the Bill and has said that a full batch will be brewed in the new year and available to pubs up and down the country, however as a classic example of what is wrong with the pubco tie, Fair Deal Victory Ale will not be available to those pubs that really want to sell it, as it will not be on sky high pubco price lists!

Ilkley  Brewery were one of the first brewers to publicly support the Fair Deal for Your Local campaign (with many brewers privately expressing  support but afraid to publicly in case it led to them being delisted on pubco lists). Richard Shelton, director of Ilkley, joined Greg Mulholland at the Yorkshire launch of the Fair Deal for Your Local campaign in April 2013, at former run down Enterprise Inns pub, now thriving and invested in freehouse, the Roebuck in Newall with Clifton, near Otley – a regular stockist of Ilkley’s fine beers – who are now of course able to sell direct to them, at brewery not pubco price.

Greg Mulholland, Coordinator of the Fair Deal for Your Local campaign and Chair of the Parliamentary Save the Pub Group said:

“Raising a glass of Fair Deal Victory Golden Ale perfect way to toast the historic Fair Deal for Your local victory in the House of Commons. A huge thanks to the superb Ilkley Brewery for kindly supplying this and to staff of the Strangers bar who ensured the beer was served in top condition. It was a pleasure joining  MPs who voted for pubs and for better access to market for smaller brewers and some of the amazing campaigners who have helped deliver this much needed change that will at least end what CAMRA have called the Pub Scandal.

“As Coordinator of the Fair Deal for Your Local campaign I would like to thank all MPs who voted for pubs and smaller brewers and to the hardy campaigners from all Fair Deal for Your Local supporting organisations who have worked to achieve this. As we raised a glass of Ikley’s delicious Fair Deal Victory Ale in the House of Commons, we also toasted the thousands of pubco licensees and pubs that will benefit from this historic change and hope they have raised a glass to this historic victory too”.

Commenting Richard Shelton, Director of Ilkley Brewery said:

“Ilkley Brewery were delighted to provide Greg and the Fair Deal for Your Local campaign with a cask of Fair Deal Victory Golden Ale and were pleased to join them in Strangers’ Bar to toast the historic vote for pubs and for brewers like us.

“Ilkley Brewery, as award winning craft brewers, backed the Fair Deal for Your Local  campaign because we want and need much more direct access to pubs, without having to go through pubcos who only pay very low prices, whilst then on-selling our beer to their own licensees at significantly more than we could sell to that pub direct.

“So we toast the Fair Deal for Your Local campaign and the market rent only option, which will make things fairer not only for pubco publicans but also will lead to a more open market, which will be a great thing for us and other brewers who will be able to offer our beer direct to many more pubs”.    

Commenting Adrian Bailey, Chair of the BIS Select Committee said

“As Chair of the BIS Select Committee, I was proud to raise a glass of Fair Deal Victory Ale to toast the historic vote of the 18th November. The BIS Select Committee proposed the Market Rent Only option in 2009 and we are delighted it will now become law, as the clear and right solution to the problems with the pubco model.

 “A big thanks to the Fair Deal for Your Local campaign and Save the Pub Group for all their efforts in making it become law and thanks of course to Ilkley Brewery for giving us a fine beer to toast our joint success with!”

1. For more information, contact Mo Saqib (Office of Greg Mulholland MP) on 0207 219 3833

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Parliamentary Save the Pub Group ridicules flawed report by tobacco lobbyist defending the pubco tie

Save The PubThe Parliamentary Save the Pub Group has ridiculed the report by the Institute of Economic Affairs’ Christopher Snowdon who is now defending the pubco tie and absurdly claiming that this disastrous business model has not had an effect on pub closures, despite clear evidence it has – evidence that Mr Snowdon has ignored. 

The IEA report “Closing time – who’s killing the British pub?” reverts back to the pub companies’ selective previous reporting of the CGA figs – the myths already explained and debunked by the ‘Pub Closures: – the truth about the misleading BBPA claims about pub closures’ by the All-Party Parliamentary Save the Pub Group in November 2013.

 In this new piece of work. Mr Snowdon has ignored the reality of pub closure figures supplied by CGA and is re-presenting some of the myths around pub closures previously peddled by pubco lobbyists, the so called British Beer and Pub Association. Once again, Mr Snowdon’s report contains the myth about tied versus free of tie pub closures, when CGA Strategy themselves have confirmed that they do not collect figures for tied versus free of tie pubs!

 The whole section on the pubco issue is also riddled with factual flaws, questionable statements presented as fact without any evidence and a series of misassumptions showing a remarkable lack of knowledge of the reality of this business model and how it works in practice. .

 The Institute of Economic Affairs (IEA) is a free market think tank based in London.  Founded in 1955, its stated mission is “to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.”

This is not the first time Mr Snowdon’s work has been ridiculed. In August 2014, following an IEA report on obesity written by Christopher Snowdon, entitled The Fat Lie; in a Channel 4 News piece The report was dismissed as “laughable nonsense which flies in the face of 50 years of science,” by nutrition expert, Dr Aseem Malhotra, a cardiologist from the Academy of Medical Royal Colleges, as well “completely wrong” by Professor Mike Lean, Chair of Human Nutrition at the University of Glasgow.

More disturbingly, in an interview with Channel 4 News about ‘The Fat Lie’, Snowdon was pressed about the IEA’s funding and whether the think-tank received food industry money, however Snowdon said he did not know, and it was also “irrelevant” whether the IEA was taking food industry money or not.

What is known, however, is that the IEA receive substantial funding from the tobacco industry – which explains why Mr Snowdon is so keen to say that pub closures are all down to the smoking ban not the disastrous pubco model, when the evidence clearly shows otherwise.

http://www.monbiot.com/2014/03/17/smoke-filled-rooms/

 The reality of pub closures figures, as previously published by the Save the Pub Group is as follows: –

 ·         CGA Strategy figures show that there has been a much greater drop in the number of leased/tenanted pubs compared to freehouses between December 2005 and March 2013 – the number of ‘non-managed’ (tenanted/leased, mostly tied) pubs fell by 5,117 compared with a fall of only 2,131 in the number of ‘free trade’ pubs. (CGA Net Closure figures December 2005 – March 2013 – Source: CGA, sent the Save the Pub Group 2013 November 2013)

·         The pubco’s trade association, the British Beer and Pub Association’s own figures show that over ten years non-managed pubs decreased by over 8,000 whilst the free trade sector actually expanded by 1,600.  (Source: BBPA Statistical Handbook 2013)

·         Enterprise Inns and Punch Taverns collectively disposed of over 5,000 pubs between 2008 and 2012, a THIRD of all of their pubs in just 4 years. No other model had anything like this disposal rate. (Figures taken from Enterprise Inns and Punch Taverns annual reports available online, 2008 Ent Inns 7763 and Punch 7560 by 2012 Ent Inns 5720 and Punch 4529)

 Greg Mulholland MP, Chair of the Parliamentary Save the Pub Group said:

 “The pseudo-economist and tobacco lobbyist Mr Snowdon is ludicrously trying to rehash old figures that have already been debunked to try to fit the reality into a twisted and extreme view of the world and it seems help his friends in the tobacco industry.  His report is riddled with flaws and false assumptions and is something that no-one can possinly take seriously.

 “Of course the All Party Parliamentary Save Group know that there have been challenges and has campaigned for lower beer duty, VAT and are also calling for lower business rates for genuine community pubs (which the IEA report seems to oppose).

 The Save the Pub Group are all for sensible changes to reduce regulatory burdens on business and have fairer taxation for pubs, but it is extraordinary that this someone who claims to believe in market economics is defending the very instrument responsible for restricting licensees with the hugely burdensome terms of the pubco tie. For Mr Snowdon to defend this anti-competitive model and the closed shop it has created, is just bizarre. 

“This is another desperate last gasp in the death throes of one of the most anti-competitive and anti-free market business models in modern UK history and if this is the best the anti-reform brigade can do with this flawed unsubstantiated nonsense, then the many credible organisations backing reform have little to worry about. According to the few people who still misunderstand or misrepresent the pubco tie, one minute it is the fault of Muslims, the next minute you have an organisation claiming to be pro free market backing the most restrictive and anti-competitive business model in the land. What’s next, pubcos blaming pub closures on the alignment of the stars?! Much needed reform is happening and it will lead not only to a fairer split of pub between the small and big businesses but will lead to a much more diverse and sustainable pub sector, something that real economists and real free marketers will welcome”.      

 For more information, contact Mo Saqib (Parliamentary Researcher to Greg Mulholland MP) on saqibm@parliament.uk or 0207 219 3833

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Fair Deal for Your Local campaign win historic vote on market rent only option

The Fair Deal for Your Local campaign today won a sensationally victory in the House of Commons, defeating government 284 votes to 269, a result that is all but set to give thousands of publicans across the country the market rent only option many have long called for.

 Going into the Small Business Bill debate, the cross-party amendment was signed by 91 MPs, with the Fair Deal for Your Local campaign itself having 212 MPs signed up as supporters. The campaign was also backed by ten organisations including the Campaign for Real Ale, Federation for Small Businesses, Forum for Private Business, GMB and Unite.

 New Clause 2 had been tabled by Greg Mulholland, Chair of the All-Party Parliamentary Save the Pub Group, Adrian Bailey, Chair of the BIS Select Committee and Brian Binley, a member of the Select Committee and President of the Save the Pub Group, with support from many pro-pub and pro-small business MPs across the House.  In the run up to the vote, over 8,000 CAMRA members contacted their MPs urging them to back the clause.

 Market rent only is a simple, market based solution what would allow tenants of the large pub companies the right, at rent review or renewal, to ask for an independent assessment of their rent without tie obligations, then have the option to pay this to the pub owning company – or to opt for a fair tied agreement with a lower rent being offered in exchange for higher beer prices.

 Commenting after the win, Mulholland said:

 “This was a victory for people power, for commonsense and for fairness and a victory a huge hard pressed publicans and their customers. I thank all MPs who had the courage to listen to their constituent licensees, CAMRA members and campaigners who have been campaigning for years to end what CAMRA call the pub scandal.

 “For too long, the large undebted pubcos have exploited their tenants and taken more than is fair or sustainable from pub profits, now the House of Commons has clearly passed the select committee option of a market rent option which will stop the pubco rip-off of hugely marked up beer prices and excessive rents.

“This is great news for pubs, hardworking pubco publicans and for communities and consumers, who will see many more sustainable pub businesses and a cheaper pint of beer, free from the pubco price escalator”.

“Contrary to typically misleading and increasingly desperate statements from their pubcos and their lobbyists, this does not abolish the beer tie. It simply gives tenants the right, at rent review or renewal, to request an independent assessment of their rent and opt to pay that if their pubco fails to offer

“As Coordinator of the Fair Deal for Your Local campaign I am hugely proud of all supporting organisations and want to say a huge thanks and congratulations to CAMRA, The Federation of Small Businesses, The Forum of Private Business, The GMB, The Guild of Master Victuallers, Fair Pint, Pubs Advisory Service, Justice for Licensees, Licensees Supporting Licensees, Licensees Unite the Union and the Punch Tenant Network. A big thanks also to the BIS Select Committee, their Chair Adrian Bailey and former Chair Peter Luff and all the members who did such important work looking at this issue and coming up with the simple, obvious, market based solution that will now become the law”.

John Allan, FSB National Chairman said:

“This is a historic day for tied publicans who look forward to a more open and competitive marketplace. The freedom to stock a wider range of beers will provide a boost to local economies while giving consumers greater choice.

 “We call on Government to support today’s decision and for all parties to back publicans in their respective 2015 election manifestos.”

Adrian Bailey, Chair of the Business, Innovation and Skills Select Committee and signatory to the new clause, added:

“Today was a great day for pub tenants and for parliamentary democracy. The MRO is the first step to releasing pub tenants from the shackles of a relationship with the Pubcos that was unfair to them, damaging to the industry and the communities it serves. However we must not assume that everything will suddenly come good. The BIS Select Committee will continue to monitor the application of the MRO and is fully prepared to take further action if is not adhered to.”

Dawn Hopkins, Licensees Supporting Licensees said:

“Our members are ecstatic at the news that MPs have voted for New Clause 2 in the Small Business Bill and have backed MRO. This is literally a life changing decision for so many tied licensees, a lifeline to be able to continue running their pubs and to actually make a living and keep our pub industry thriving. We cannot thank enough the MPs that voted ‘yes’, and to all those involved in the Fair Deal For Your Local Campaign who worked so hard to make this happen.

Paul Naylor of Licensees Unite said:

“Unite are proud to be part of pub history on today’s momentous events in Westminster, that should see the pub sector being fairly treated and hopefully to stem the tide of closures and stabilising what was in danger of becoming a failing industry.”

Paul Kenny, GMB General Secretary, added:

“MPs have done the right thing and GMB welcome this. Government must accept this vote and move to properly implement it to save 25,000 tied pubs.

MPs have voted for a clause that shows that the market rent only option is a simple, cheap to administer and market based solution that at certain trigger points would simply give licensees the choice as to whether to pay a fair rent only or stick with a tied agreement. This choice will force the large pub companies to ensure that their tied agreements – where tenants pay marked up prices for beer and other products and services – are competitive, fair and attractive to tenants.”

For more information, contact Mo Saqib (Parliamentary Researcher to Greg Mulholland MP) on saqibm@parliament.uk or 0207 219 3833

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Alison Smith – ‘As a Conservative former pubco tenant, I urge you to support NC2 & vote for pubs’

Dear Conservative MP,

I am writing you as, as a fellow Conservative – a party member and activist – who is a former Punch Taverns tenant – to tell you the reality of the pubco tied model – and to ask you, as a Conservative, to vote for cross party New Clause 2 at 4pm today.

My name is Alison Smith, I ran a Punch Taverns pub with my partner. I know that you have heard from Punch Taverns about their views on their relationship with their tenants, but you need to hear from me the reality of this business model on the ground, in their pubs.

We were told what a good opportunity the pub was, yet once we had signed up – it was the all too common story (you must have heard it from your own constituent pubco publicans) of struggling to make a living, despite working really hard, despite innovating and eye watering marked up beer prices – significantly more, 60/70% more – than we could have bought direct from local  brewers (who of course, we weren’t allowed to trade directly with, or we would be hit with draconian fines).

Our rent (‘dry rent’ as we call it in the ‘trade’) wasn’t any lower as a result of us having to pay these marked up prices. In fact, it went up, precisely when we were doing well – punished, it felt to us, for doing well and improving the pub’s turnover, which we were proud to do.

In the end, despite improving the turnover – and making our pub a popular place for our local community, a community we cared passionately about and saw ourselves as the hub of – we couldn’t make a living ourselves, due to the excessive beer prices and rent we were obliged to pay – and we had to leave the pub, which we were bitterly disappointed about.

So whatever you have heard from Punch Taverns, in their recent PR drive, and from their lobbyists the British Beer and Pub association, who speak for them, I need to tell you the cold, hard reality of the pubco tied model, which is one that does not work for hardworking publicans and does not work for community pubs.

So I must ask you – as a Conservative – who shares my values of entrepreneurialism, competition, hard work and enterprise – do you really think this is a business model that you can and should support?

As a Conservative, I can tell you that there needs to be reform to stop the large indebted pubcos from taking too much from individual pub profits which has stopped many licensees like me from taking a fair share of the money they work hard to get in the till. It is also a model that creates an artificial price for beer – how can it be right that giant non brewing companies dictate the price of beer to pubs – forcing breweries to sell beer at lower prices than  many microbrewers can manage and then marking it up hugely, way above what anyone can buy beer for direct, to their own supposed business partners? Does that sound like a competitive, open market to you? It isn’t, it is a closed market, dictated by companies who got themselves into billions of debt by overvaluing their estates and borrowing money against that imaginary value. It isn’t a market or model that any Conservative should defend.

Surely we want to allow many more hardworking publicans to stand on their own two feet, to decide what deal is right for them, to buy beers direct from brewers according to what they think our customers want – not whatever we can get on our pubco price list, where everything is much more expensive that the brewery price?

The pubco model is anti-competitive, distorts the market, stops smaller brewers getting access to market and relies on artificially inflated price (yes, it is a form of price fixing).

So as a Conservative – and a former Punch Taverns tenant, I urge Conservative Members to vote for new clause 2, supported by the Fair Deal for Your Local campaign, to deliver the market rent option (MRO) tied publicans need.

The market rent only option is the cross party select committee solution, that was proposed in 2009 – and should have been implemented in 2011. The pubcos have had several ‘last chances’ now to get their house in order, but each time have failed to do so. This is the right solution – it is a market based solution merely re-establishing the basic commercial rent, which should be and always the benchmark – then tied agreements would once again offer lower rents, for agreeing to pay higher beer prices (unlike the pubco model, which is based on high beer prices AND higher rents – with average tied rents actually now higher than free-of-tie rents, when the opposite should be true.

Please be clear that it is an OPTION – to stop the chronic overcharging – and is a simple, market based, that would comes in very gradually – over five years – allowing all companies the time to adjust their business model (and far from abolishing it, makes the tie fair and work as it is supposed to – i.e. offering lower rent for higher beer prices).

In truth I can tell you, as a former tied licensee that MRO is the ONLY realistic solution to what CAMRA have called the pubco scandal which has closed so many pubs.

The Parallel Rent Assessment (PRA) in the Bill is NOT the same as the market rent only option in NC2, and does not give publicans the advantages which an MRO would. That is why the pubcos have openly stated they do not believe the PRA is problematic for them. Indeed, Punch Taverns have stated “Punch does not believe that the reforms currently proposed would materially adversely affect the Punch Group”.

PRA is actually more regulatory than MRO – and makes the Adjudicator the rent assessor rather than being an Adjudicator on disputes, which simply doesn’t make sense when their job should be to deal with disputes, not survey and calculate pub rents.

For those with regional/family brewers in your area, you can be vote for NC2 knowing that no family brewer would be affected – the clause deliberately excludes them – and could not be changed without changing primary legislation.

Not backing MRO is allowing the pubcos to carry on business as normal, with no real mechanism for stopping the pubcos charging excessive beer prices AND excessive rents (the Associated Licnesed MR survey show tied rents are now HIGHER than FOT ones).

Two thirds of those who responded to the Government’s own consultation said they supported the market rent only option – so why is a Conservative led Government ignoring this and proposing something supported by no-one?

It is very notable that whilst the large pubcos lobby you to vote against NC2, so they would not any longer be able to continue take too much from licensees profits to pay  off their debt, that NC2 is supported by the two leading small business organisations in the UK, the Federation for Small Businesses and the Forum for Private Business as well as CAMRA and licensees organisations.

So please listen to someone who actually knows how the pubco model works – and how despite our very hard work and best efforts, it just wasn’t possible to succeed. My experience on the sharp end of this was that the current system allowed my landlord too much control over my business, especially where the economic climate is fluctuating and where having restrictions on your cost of sales adversely impacts your profitability.

So to conclude, the pubco tied model is unfair, grossly so, uncompetitive, frustrating and also strips away creativity and enterprise from individual tenants who may wish to develop their business away from the standard products offered on a tie. This system has no place in the 21st Century – and also has no place being supported by those who share Conservative values!

So please – as a Conservative – please show your support for hardworking publicans, for pubs and for a freer, more competitive, more open pubs and beer sector – and vote for pubs, NC2 and a fair deal for your local today.

Yours sincerely,

 

Alison Smith

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Conservative party activist & former Punch Taverns tenant urges Conservative MPs to vote for pubs and back New Clause 2

Date: 18th Nov 2014

A Conservative Party member and activist, a former Punch Taverns tenant, has written to all Conservative MPs telling them about the reality of the pubco tied model – and urging them to vote for pubs and hardworking licensees – and back New Clause 2 of the Small Business Bill.

The new clause, being debated this afternoon as part of the Small Business Bill, would introduce the cross party BIS Select Committee solution to the well documented problems with the pubco model – the ‘market rent only’ option for tenants of the large pubcos.

Alison Smith ran a Punch Taverns pub with her partner, believing it to be a good business opportunity and they worked hard and innovated, to make the pub a popular community hub. However despite improving the pub’s takings, they found that the eye watering marked up beer prices and excessive rents they were forced to pay made it impossible for them to make a living – and they ended up leaving the pub.

Alison, who is a committed Conservative, believes that people need to know the truth about the pubco model – which she feels is not one that Conservatives would support if they truly understood how it operated.

Alison’s intervention has been welcomed by Chris and Von Lindesay,  Punch tenants who also coordinate the Punch Tenant Network, which promotes mutual support among Punch tenants.

The Punch Tenant Network, alongside CAMRA, the Federation of Small Businesses, the Forum of Private Business and licensees’ organisations all support New Clause 2 and the market rent only option. This is a simple, market based solution that would allow tenants of the large pub companies the right, at rent review or renewal, to ask for an independent assessment of their rent without tie obligations, then have the option to pay this to the pub owning company – or to opt for a fair tied agreement with a lower rent and benefit package being offered in exchange for higher beer prices.

The vote on New Clause 2 is expected to very close, with Government whips seriously worried that the Government may lose the vote. Over 8,000 CAMRA members have already contacted their MP urging them to vote for pubs and NC2.

New Clause 2, has been tabled by Greg Mulholland, Chair of the All-Party Parliamentary Save the Pub Group, Adrian Bailey, Chair of the BIS Select Committee and Brian Binley, a member of the Select Committee and President of the Save the Pub Group, with support from many pro-pub and pro-small business MPs across the House.

The Fair Deal for Your Local campaign is backed by 212 MPs, and 74 MPs have signed the cross-party new clause, including 14 Conservative MPs.

Commenting, Alison Smith, Conservative activist and party member, said:

“As a Conservative party member and activist, and a former Punch tenant I would strongly urge Conservative Members to vote for new clause 2, supported by the Fair Deal for Your Local campaign to support the market rent only option. Whatever they have been told by Punch and their lobbyists, I can tell them the reality of the business model.
“My experience on the sharp end of this was that the current system allowed my landlord too much control over my business, especially where the economic climate is fluctuating and where having restrictions on your cost of sales adversely impacts your profitability. The pubco tied model is grossly unfair, uncompetitive, frustrating and also strips away creativity and enterprise from individual tenants who may wish to develop their business away from the standard products offered on a pubco price list. This damaging and skewed business model has no place in the twenty-first century!”

Chris Lindesay of the Punch Tenants’ Network added:

“The sad reality is that Alison’s experience is not an isolated one, with many other tenants of large pubcos having been through or currently facing similarly difficult situations. I hope Conservative MPs will listen to their constituents and their own members, hardworking people like Alison, and back New Clause 2.

“We believe that the legal capability of Pubcos to enforce the beer tie, with no possible recourse available to the tenant causes most of the problems. New Clause 2 and the market rent only option will resolve that, gradually, and in a natural non-regulatory, but market- based process based on commercial rent.  We really don’t understand how anyone could possibly object to this, but as some do, including Punch Taverns, we will continue to tell people the reality of the model and why this simple solution is the right and only one”.

Brian Binley MP, Conservative MP and President of the Parliamentary Save the Pub group and a member of the BIS Select Committee commented:

“This crucial new clause would make the Government’s currently weak proposals work and is a simple, market-based mechanism that would finally tackle what CAMRA have called the ‘pub scandal’ of the large pubcos.
“MPs, including Conservative ones, must help end the scandal that is contributing to an average of 31 pubs closing a week. The only question today is whether they will stand up for pubs or for greedy pubcos who still today are exploiting licensees like Alison.”

John Allan, National Chairman, Federation of Small Businesses, said:

“Pubco tenants aren’t getting a fair deal and this will continue unless they have the option to go free of tie, with an independently assessed rent.

“Our research showed that the ‘market rent only’ option would bring significant benefits in terms of investment, employment and consumer choice. This New Clause will give MPs the opportunity to ensure that the Small Business Bill provides a fair deal for tied pubs.”

[ENDS]

Notes to Editors:
1.       For more information, contact George Scott (Administrator of Fair Deal for Your Local campaign) on georgescottateastcotearms@hotmail.co.uk or 0207 219 3833

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Fair Deal for Your Local write to government: “Accept simple, market-based solution to pubco overcharging and back New Clause 2”

The Fair Deal for Your Local campaign, leading the fight to get New Clause 2 into the Small Business Bill at next week’s report stage, have written to government calling on ministers to back New Clause 2 and enshrine in law the market rent only option.

The letter argues that the Bill as it stands is “flawed” and “will not deliver the Government’s two key commitments to fairness and to the principle that the tied licensee is no worse off than a free of tie licensee”.

 It goes on to set out the market rent only option, how it will work in practice and a list of the ten organisations backing the campaign for New Clause 2, including the Campaign for Real Ale, Federation of Small Businesses, GMB and Unite. The letter is also signed by Greg Mulholland MP, Chair of the parliamentary Save the Pub group, and Adrian Bailey, Chair of the Business, Innovation and Skills Select Committee.

 The Fair Deal for Your Local campaign coalition is calling on MPs to vote for the cross-party New Clause and allow the market rent only option for tenants of the large pubcos, with this applying only to companies that own 500 or more pubs, applying to their leased, tenanted and franchised pubs only.

 48 MPs in total now back New Clause 2, including 29 coalition MPs and former business minister Jenny Willott. This number of MPs backing the clause is expected to increase further before the vote on Tuesday afternoon, and only ratchet up pressure on government to help the clause go into the Bill.

 Tom Stainer, Head of Communications, CAMRA:

 “Thousands of CAMRA members will be lobbying their MPs asking them to support pubs by voting to put a stop to the sky high rents and beer prices the big pub companies impose on their tenants. Allowing tenants tied to the big pub companies the simple choice between a tied agreement and a rental only agreement will be a big boost to the pub sector. Government must show it is on the side of Britain’s pub goers, who will be the ultimate beneficiaries of these reforms as they will keep valued pubs open, promote investment and help keep the price of a pub pint affordable.”

 John Allan, National Chairman, Federation of Small Businesses, said:

“Pubco tenants aren’t getting a fair deal and this will continue unless they have the option to go free of tie, with an independently assessed rent.

“Our research showed that the ‘market rent only’ option would bring significant benefits in terms of investment, employment and consumer choice. This New Clause will give MPs the opportunity to ensure that the Small Business Bill provides a fair deal for tied pubs and government must back it.”

Phil Orford MBE, Chief Executive, Forum of Private Business:

“We feel that this New Clause is important in stimulating competition within the industry, allowing pubs to sell local beers alongside national brands and helping to put pubs back at the heart of their local community. Publicans, like all small business owners, want to create a business that they are proud of, without excessive bureaucracy or restrictions on their ability to trade.”

Greg Mulholland MP, Coordinator of the Fair Deal for Your Local Campaign & Chair of the Parliamentary Save the Pub Group said:

“The Government should now accept the simple, market based solution to end the scandal the large pubcos taking too much in pub profit and should accept New Clause 2 to at last introduce the much needed market rent only option for large pubco tenants. 

“There is a clear majority in the House of Commons in favour of the market rent only option, with 29 Government MPs signed up to this and the Fair Deal for Your Local campaign. We would clearly win a free vote end the Government should not seek to whip pro pub MPs to vote against it. We hope the Government will see sense and adopt the solution backed by CAMRA, the Federation of Small Businesses and the Forum of Priage Business, but if they don’t then we will be calling on all MPs to vote for pubs and a Fair Deal for Your Local on Tuesday and we will seek to win the vote”.

Adrian Bailey MP, Chair of the BIS Select Committee said:

“New Clause 2 for a market rent only option for tenants of the large pubcos is the cross party select committee solution. It is the solution that the committee, first chaired by a Conservative MP then a Labour one, came to after our four reports and was backed by all members. The Government were wrong to ignore it in 2011 and they should have the sense to accept it now, to finally deal with the ongoing imbalance of the large pubcos taking too much from pubs’ profits.”

Brian Binley, President of the Save the Pub Group and a member of the BIS Select Committee said:

“There is strong support for the market rent only option and the Fair Deal for Your Local campaign on all sides of the House of Commons. The Government have run out of excuses as to why not do the obvious and sensible thing and back the cross party BIS Select Committee market rent only option. I urge Ministers to now do this and to introduce this gradual, sensible, market based solution which will simply stop the exploitation of licensees through excessive beer prices and rents, but will allow brewers and all sustainable companies to work in partnership with their tenants.”

Notes for editors:

1.     The letter to government is as attached.

2.     For more information, contact Mo Saqib (Parliamentary Researcher to Greg Mulholland MP) on saqibm@parliament.uk or 0207 219 3833

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