Could action on 'tied' pubs stop so many closing in Cornwall due to rent hikes (From Falmouth Packet)
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Could action on 'tied' pubs stop so many closing in Cornwall due to rent hikes
1:00pm Tuesday 3rd June 2014 in News
The Government has announced long-awaited plans to tackle complaints about landlords "tied" to large pub companies, saying they will now be protected from unfair treatment.
Publicans who have to buy supplies from so-called pubcos say they are struggling to make a decent living, with more than half earning less than the minimum wage.
Tied tenants have to buy beer from their pubco, usually paying a higher price, leading to complaints that they cannot compete with other pubs.
Under the new code, the Government said pub landlords will benefit from fairer rent assessments.
Under the reforms, all tied tenants will be given the power to request a rent review if they have not had one for five years.
For the first time, tied tenants will also have the right to review the information pub-owning companies have used to decide to increase rents.
Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable announced that the Government will give publicans new rights under a statutory code, and set up an independent adjudicator with the power to resolve disputes.
The adjudicator will enforce the new code, arbitrate disputes, carry out investigations into alleged breaches and impose sanctions on pub-owning companies if they fail to comply.
Mr Clegg said: "British Pubs are often the centre of our community, a place where we meet friends, watch sport and enjoy a Sunday roast - they are a national treasure and the envy of the world.
"They also contribute billions to our economy every year. But, for too long, landlords who are tied to larger pub companies have struggled to make ends meet.
"The self-regulatory approach hasn't worked, so these new rules will give fairer treatment for landlords so that they can keep your local pub going strong."
Mr Cable said: "Local pubs and their owners play a vital part in vibrant local communities right across the country, as well as making an important contribution to the economy.
"Far too many landlords feel their income is squeezed by big pub companies. So today we are taking action to make sure they get a fairer deal.
"The introduction of a statutory code will make sure that tied tenants get an accurate assessment of how better off they could be and the new independent adjudicator would make sure pubs companies are forced to act to redress the situation if they aren't behaving responsibly."
Ministers believe this greater transparency will allow tenants to see what information their landlord has used in calculating the rent, and decide whether an increase is fair.
There will be additional protection for tenants whose pub-owning company owns 500 or more tied pubs.
The Government held a consultation a year ago on the pubco system, which attracted a huge response from the industry.
Steve Kemp, of the GMB union, said: "Self-regulation has been rejected, which is to be welcomed.
"We will study what is proposed to see how workable it is, but we regret that the free-of-tie option has been ruled out."
Camra's head of communications Tom Stainer said: "We are delighted that after our 10 year campaign the Government is now introducing a pubs adjudicator to protect the nation's pubs.
"With 28 pubs closing a week it is vital that publicans, who are on the frontline of keeping our valued community pubs open, are given protection from heavy handed business practices from the big pubcos.
"Publicans could see the price they pay for beer fall by up to 60p a pint if the adjudicator forces the big pubcos to match open market prices. A 60p a pint saving would be a huge boost in the battle to keep pubs open and could lead to cheaper pub prices for customers.
"While we urge the Government to go further by introducing guest beer and market rent only options for tied publicans, today's announcement is great news for publicans and pub goers alike.
"Over the last decade many thousands of pubs have been lost as big pub companies have squeezed them out of existence with sky-high rents and beer prices."