Once there was a time when most of the pubs around were emblazoned with the names of the breweries that owned them. In Lynn, you may have seen Bullards, Steward and Patteson, Morgans or Bagges proudly displayed outside, advertising the beers on sale in the bar. By the time I arrived in town there were four Greene King pubs, one Elgoods and most of the rest were Watneys. How did this happen? Most industries start with a large number of small enterprises and as time goes by, these are combined by merger or takeover to form a fewer number of big operators. Look, for instance at the car industry or the growth of supermarkets at the expense of independent shops. With breweries the aim of the takeovers was mainly to acquire the pubs, a guaranteed market for the beer which could be brewed at one large brewery to take advantage of economies of scale. However this resulted in the establishment of the large national concerns such as Watneys and Whitbread. In 1989, the beer orders were published to try to curb the influence of these large companies and, for example, force them to take guest beers.
This had the unintended consequence of the separation of the pubs and the brewing operations, eventually resulting in many of the country’s pubs being owned by property companies such as Enterprise or Punch Taverns. In the past the landlord of a pub tied to a brewery would either enjoy a low rent or a large profit margin on beer sales. With the property companies the rents increased, and whilst the companies could buy their stock at a discount due to the volume purchased, these savings were not passed on to the landlords. This resulted in a lot of people entering the trade, and losing a lot of money when they realised they could not make a profit, with pubs closing to be sold off to pay interest on the money borrowed to set up the pub chains in the first place.
For years CAMRA has campaigned against this system and for introducing safeguards for tenants, and in July this year, the pubs code finally came into force. Tenants of tied pubs that belong to companies operating over 500 pubs in England and Wales are now protected by the legislation which gives around 12,000 tenants new rights and protections such as increased transparency about the tied deals available, a fair rent assessment and the right to move to a free-of-tie tenancy in certain circumstances. Companies that are covered by the legislation include Greene King, Marstons, Admiral Taverns, Punch Taverns and Enterprise Inns. To find out more about the code check out the website https://www.gov.uk/government/organisations/pubs-code-adjudicator, or call 0800 528 8080.
Naturally, CAMRA is pleased with this enhanced protection for landlords, but are less pleased by the identity of the Pubs Code Adjudicator who will make the decisions. He is Paul Newby and before taking the job he was a director of Fleurets who are a firm of specialist surveyors and one of the leading firms involved in selling licensed properties in the country which involved working for some of the groups named above. It seems that there could be a conflict of interest by appointing a person who has essentially made his living selling pubs for two decades into a role adjudicating disputes between pub owning groups and tenants. He has given up his directorship and promised to take a ‘balanced’ view of disputes. Time will tell – let’s hope the new system works and gives some relief to hard pressed landlords.