With the recent news that pub landlords are planning on striking in the New Year arrives with a potentially welcome bit of information that landlords could slash prices of beer by 30 pence per pint on average.
Being pub enthusiasts here at Business Advantage we are all waiting with much gleeful anticipation of these strikes!
However, let’s not lose sight of the bigger picture here. I am going to take a few minutes to reflect on just why these strikes are actually happening.
Pubcos are a number of large organisations that own a number of pub properties around the UK and supply beer to their “tied tenants” (tenants are small business owners that rent from the company and are tied into buying solely from the Pubco).
The Office of Fair Trading (OFT) recently found that these Pubcos overcharge each pub by more than £12,000 per annum but refuse to do anything about it as they claim it is out of their remit.
Consequently the GMB (a general union in the UK) have encouraged pub landlords to take industrial action against these Pubcos in an effort to cut these excessive payments. Paul Maloney of the GMB said:
“In furtherance of the trade dispute in tied pubs, GMB will organise a nationwide official ballot in the New Year to seek a mandate for official industrial action by tied tenant members in the industry.”
He added that consumers are likely to welcome strike action as it could save them up to 30 pence on average per pint.
Despite this the Pubcos did come up with a very good point:
“There is a lot of scratching of heads about how the GMB intends to call strike action without it being illegal. The people they’re balloting are not even their own members.”
This does raise the question as to whether or not the strike will be allowed to go-ahead. Currently only 3,000 pub landlords are members of the GMB union. Despite this, the union have urged over 25,000 pub landlords across the UK to strike. So the Pubcos are certainly at liberty to question the legality of the proposed strike.
However, regardless of the questionable legality of the strikes, I am inclined to back Mr Maloney when he says:
“The British public is being ripped off and the British pub trade is being driven to the wall. We are balloting for mass action that will see pubs switching off equipment up and down the country. The price of a pint would then come down in every pub in every town.”
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