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Mandatory free-of-tie option would make many more pubs unviable – BBPA responds to Select Committee report

22/07/13


Commenting on today’s DBIS Select Committee report on pub companies, Brigid Simmonds, Chief Executive of the British Beer & Pub Association, said:


“It is good to see the Committee views the new arbitration systems set up under self-regulation, (PIRRS and PICA-Service) as a positive development that they would not wish to see lost. It shows we have made significant progress on self-regulation, something we could develop further without costly and inflexible legislation.


“The Select Committee supports a threshold of 500 pubs and believe that these should only be leased and tenanted pubs. Their proposal for flexibility to amend the threshold would create uncertainty for smaller companies and could be detrimental to future investment. The BBPA has always been clear that market distortion must be avoided.


“The Select Committee supports a free-of-tie option, but does not call for the abolition of the tie. There is a real concern from the industry that diluting the buying power of companies by forcing a free of tie option will make many more pubs unviable.


“Over the last ten years, pub companies have faced five inquiries and two OFT reports, with the basis for a tied system for public houses supported in every case.


“Tenants would lose support from their pub company, and face big increases in their capital requirements, as they would have to fund costs such as rent increases, deposits, and new fixtures and fittings, themselves. In the current economic climate, many would be unable to secure the necessary finance. It would be very bad news for the pub sector.


“No mention is made of the importance to British brewers of the tied model which offers a route to market for British beers.


“It is clear that the Select Committee is struggling to find solutions to some of the issues it raises which are not easy to resolve. This shows clearly that the perceived problems and solutions are complex, with the potential for many unforeseen consequences – is legislation really the right answer?”


Notes to editors:

The British Beer & Pub Association is the UK’s leading organisation representing the brewing and pub sector. Its members account for 96 per cent of the beer brewed in the UK and around half of Britain’s 50,000 pubs.




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Pubs


For further information contact:

Neil Williams
Head of Media
nwilliams@beerandpub.com
Tel: 020 7627 9156 / 07974 249 779


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