High rents and pressure to buy products has resulted in uneconomic pubs and mass closures
The Bar Man, by Jeff Hoyle (CAMRA), Friday, July 26
Nostradamus. Remember him? The guy who could predict the future.
If you look at his writings, it is all in riddles. The Bear will defeat the Eagle kind of thing, which some will interpret as Russia defeating the USA, but only after the event has happened. Me? I think it might just as well refer to the result of last week’s darts match down the Eagle.
Still, for those who like this stuff, something spooky happened recently. Heineken is most famous for its lager in this country, and some will remember back to the 1970’s when they used the tag line ‘Heineken refreshes the parts that other beers cannot reach’.
While we giggled away as we went round the back to relieve ourselves, how many of us realised that we were experiencing prophecy in action? That Terry Lovelock, who came up with the phrase, was looking 45 years into the future, to a time when literally other beers were not allowed to be sold in Heineken controlled pubs.
For it has come to pass, that the Pub Codes Adjudicator, Paul Newby, no doubt guided by a big red star, has launched a probe into the company’s retail empire.
Called Star Pubs and Bars Limited, after the star on their logo, they are under suspicion of imposing unfair terms on their tenants, and forcing them to buy beer and other products from Heineken, the ultimate owner of the premises.
It is about time that the PCA flexed its muscles. It was established in 2016 as a result of sustained pressure from CAMRA and other organisations to find a way of ending the situation where high rents alongside requirements to purchase beer and other products from specified suppliers at inflated prices.
This has resulted in uneconomic pubs and contributed to the mass closures we have witnessed.
Anecdotally, I have heard stories from landlords of them being asked for £1,000 per week rent while having to pay double the open market price for their beer.
It is fair to say that some think the PCA has been dragging his feet on this issue.
The current incumbent is Paul Newby, who was a director of Fleurets, who specialise in selling pubs and restaurants and who has acted for some of the companies he now regulates, so goodwill towards him may be in short supply.
Star have 2,700 UK pubs and some of their tenants have a ‘market rent only’ agreement with them and the investigation seeks to discover whether these tenants were forced to stock only Heineken kegs, or an unreasonable volume of the Dutch beer company’s brands, or other drinks in which it has a financial interest.
Landlords have until August 5 to submit evidence and will not be identified in the report. And what are the potential penalties? It seems that many regulatory bodies are getting serious.
Reckitt Benckiser has just agreed to pay a £1.4 billion fine in the USA without admitting any wrongdoing. Barclays and RBS have been fined £1.1 billion for their role in rigging currency markets, and Facebook have had a £5 billion fine levied by US regulators for their mishandling of personal data.
It would be disappointing, therefore, if Heineken were found guilty and just given a token fine or a slap on the wrist. The problem goes far beyond one company, and a message needs to be sent to others such as Punch and Ei, that breaches of the code are taken seriously.
Now where is that passage in Nostradamus about the Red Star sinking slowly over the Low Countries as lots of money changes hands?