By Daniel Hunter
Struggling pub landlords were promised help today (Tuesday) with Business Secretary Vince Cable announcing plans for an independent Adjudicator to address unfair practices in the industry.
As well as the new Adjudicator Dr Cable also wants to establish a new statutory Code to look at the relationship between large pub companies and publicans, which will be enforced by the Adjudicator.
This new Code will ensure fair practices for a number of issues including rents and the prices publicans pay for beer. It would also have the power to investigate and deal with disputes between pub companies (pubcos) and publicans, and in some cases have the power to fine.
In particular, the proposed Code would prevent abuses of the beer tie, which oblige publicans to sell particular types of beer. It would enshrine the fundamental principle that ‘a tied licensee should be no worse off than a free-of-tie-licensee’ which will ensure a level playing field is maintained in the pub sector.
“There is some real hardship in the pubs sector, with many pubs going to the wall as publicans struggling to survive on tiny margins," Business Secretary Vince Cable said.
"Some of this is due to pubcos exploiting and squeezing their publicans by unfair practices and a focus on short-term profits. Four Select Committee reviews since 2004 have highlighted these problems.
“Last year we gave the pubcos one last chance to change their behaviour but it is clear that the self-regulatory approach was not enough and in October I wrote to the industry to seek their views. A change in the law is now needed to shift behaviour.
“I hope these measures mean publicans are given a fairer chance at running their pub, which in turn will help them grow their businesses instead of losing them.”
The formal consultation on these proposed measures will be launched the spring.
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