By Daniel Hunter
Publicans unanimously call for more choice for their customers according to new research published today (Friday) by the Federation of Small Businesses (FSB). In a new survey all respondents say pubs locked into deals with the main pub companies should be able to stock a guest beer.
The poll, which surveyed 167 FSB publican members, comes as the Government consultation on regulation for big pub companies or ‘pubcos’ closes today (Friday 14 June). The results show clearly that publicans want a fairer deal from companies that rent out pubs so they can respond to customer demand (87%) and compete effectively with non-tied pubs in their areas (98%).
The FSB has long campaigned for a fairer playing field for publicans that rent pubs from one of the big pub companies. Self-regulation of the industry hasn’t worked and the FSB is pleased that Government had intervened and began consulting on legislative action.
Tied tenants are forced by pubcos that own the pubs to buy certain types of beer, often at inflated prices. FSB research shows that almost 90 per cent believe they are forced to pay significantly more for beer than they would pay if they bought it on the open market.
Furthermore, as the pub companies place restrictions on what tenants can sell, many don’t feel that they can respond to changing customer demand. An overwhelming 100 per cent of respondents feel they should be able to stock one guest beer. The majority of respondents say that being free of the tie would mean they could stock local beers (94%) which would help support smaller breweries, and many would stock beer from a variety of brewers (97%).
FSB research has also revealed that tenants of the large pub companies are tied for an ever-increasing range of products. Almost six in 10 (57%) respondents that are tied to the pubco for beer are tied for amusement machines too.
And, while the tenants are forced to pay more money to the pub company for these products, only one in five tied pubs saw any investment from the pubco they rent from, with 68 per cent of respondents saying they had invested their own money in the last 12 months.
To support a diverse and healthy pub sector and to provide consumers with choice and support smaller breweries that are experiencing a renaissance, the FSB believes the Government must press ahead with regulation of the UK’s largest pub companies. The Government must act to:
- Allow tied publicans to sell a guest beer
- Prohibit any products other than drinks to be tied
- Give the publican the right to request an open market rent review
- Allow tied publicans to go free of tie by paying market rent only for the pub
“It’s time for more choice in our pubs and a fairer deal for publicans and that's what the FSB wants to see. Giving drinkers more reason to head to their local pub and more freedom to those who pull the pints," John Allan, National Chairman, Federation of Small Businesses, said.
"Self regulation clearly hasn’t worked, and our members are paying inflated prices to the large pub companies to make up for the mistakes they made in the property boom while at the same time are not being given a choice of what they can stock.
“Because tied tenants are forced to buy products through the company they are tied to, they rely entirely on the pub company to respond effectively to changing demand.
"Our tied publican members want to move with the times by having more local products on tap. So, by allowing tenants of the large pubcos to go ‘free of the tie’ it would help support local economies and challenge pub companies to offer a fair deal to publicans.”
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