Pub tenant landlords will welcome news that new laws could be introduced forcing pub companies (Pubcos) to change practices that are said to be anti-competitive.
Following up previous reports, the Business Innovation and Skills Committee (BIS) has said that it wants to see some real reform in the pub sector and have called for “beer ties” to be investigated.
Beer ties require tenant landlords to buy all or at least some of their beer and other alcoholic supplies direct from the pubco owner.
Many landlords have reportedly said that they would prefer to buy their alcohol stock elsewhere due to the high rent imposed on them as well as failing to pass on beer discounts to their tenants.
The pubcos have been given until June 2011 to resolve the issues before BIS take action.
The MPs commented:
“Should those problems persist beyond June 2011, we will not hesitate to recommend that legislation to provide statutory regulation be introduced.”
A spokesperson for The British Beer and Pub Association (BBPA) stated that they are determined to address concerns raised in the report by “raising standards and putting into practice the new Framework Industry Code.”
The BBPA went on to say:
“This will deliver greater transparency to prospective tenants and lessees, more information, training and a low-cost independent rent review panel for existing tenants and lessees.”