Brighton and Hove pubs need a fair measure

From Brighton to Bristol and Hove to Hartlepool, a row has been brewing in the pub trade.

And it will leave a nasty taste in drinkers’ mouths if ministers bottle it, according to a senior MP.

The politician – Adrian Bailey – has stepped into a power struggle between David and Goliath in the licensed trade.

On Thursday (12 January) Mr Bailey will ask the government to make good on its promise to help cut Goliath down to size.

If ministers hold back, Mr Bailey fears that more pubs will close and more of the pub trade Davids will be out of a job and drowning in debt.

The minnows in this debate include the tenants and leaseholders who run many of the 300-odd pubs across Brighton and Hove.

While some might hesitate to describe the giant pub companies as sharks, others have been less restrained.

Intimidating

A cross-party committee of MPs even referred in an official report to a “history of … intimidating behaviour by pub companies”.

Chris Wright, from specialist debt adviser Twinpier, who has dealt with a number of financially troubled pubs locally, said: “The abuses of the pub companies are chronic and historic and are well documented.

“These are abuses of people who lack economic power. They need to bring back a sense of fairness.

“It’s a shocking problem. It’s almost Dickensian.”

The nub of the problem is that the big pub companies hold all the cards in their dealings with individual publicans.

They dictate the terms which, controversially, include what is known as the beer tie. Tied houses must buy their beer from the pub company. They are not allowed to buy cheaper beer elsewhere.

Tied houses pay much more for a barrel than a free house – that is, a pub that is not a tied house. The genuine free houses are those run by an independent publican or a small local company.

Many big pub companies also operate a tie on other drinks, even soft drinks, and the restrictions can even extend to gaming machines.

Claims

A committee of MPs said in a 2009 report: “The dispute over the tie could be ended easily: every lessee could be offered the choice of being free or being tied. This would enable both sides to prove their competing claims.”

So far the big pub companies appear to lack the courage of their convictions on the benefits of the tie.

They justify the higher prices for a tied house by saying that they give individual publicans a low-cost and low-risk chance to run their own business.

Yet a few months ago Brighton and Hove Licensees Association said in a report to the council: “There is a high level of business churn in public houses throughout the city with many businesses going into administration.

“One national pub company landlord has informed us that of the 65 sites in Brighton and Hove they lease out there have been 33 business failures since 2008.”

The costs and risks appear to be out of balance in a distortion of market power that a previous government tried to tackle by changing the law.

Villains

The “beer orders” in 1989 targeted the big brewers which were then cast as the villains of the piece. Among other things the beer orders required tied pubs to be allowed to stock a guest ale.

On Thursday Mr Bailey, the Labour MP for West Bromwich, will call on the government to introduce a statutory code of practice for the trade and an independent adjudicator.

He chairs the cross-party House of Commons Business, Innovation and Skills Committee.

The Conservative MP for Brighton Kemptown Simon Kirby is one of its 11 members. He built up a chain of pubs and clubs before selling them and moving into politics.

Mr Kirby said: “As an MP with previous experience of the pub trade who sits on the committee I am keen to help local pubs and I will be listening closely to the debate.”

They need help. But Punch Taverns, Enterprise Inns and the other big pub companies seem to be keeping an unfair slice of the takings.

All this comes as pubs already struggle with a tough economic climate, high levels of duty and cut-price competition from the supermarkets.

Any abuse of a position of strength by the Goliaths of the sector merely places one more obstacle in the way of a thriving pub trade.

And that’s not just bad for the tenant Davids and for genuine free trade but bad for our communities.

It’s time to call time on unfair practices.