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New rules bring cheer to the local pub
REFORMED regulation of pub companies – or pubcos – could help to stem the decline and closure of local pubs and boost local breweries, according to industry insiders.
The Government said a code and the appointment of an independent adjudicator to govern companies owning more than 500 pubs would ensure fair practices on rents and the prices publicans pay for beer.
In particular, it aimed to prevent abuses of the beer tie, which oblige publicans to sell particular types of beer.
York landlord Paul Crossman said he hoped every tied pub would be offered the option to buy its own beer on the free market.
Mr Crossman is a lessee of a pubco at The Swan in Clementhorpe, and also co-owns freehold pubs, The Slip Inn and the Volunteer Arms, as well as soon reopening The Woolpack in Fishergate after buying it freehold from a pubco.
He said pubs under the beer tie must buy beer from the pubco’s list of breweries, at a premium of about 50 per cent more than they could buy on the free market.
He said this prevented tied pubs from serving beer from local breweries, saying it could cost The Swan up to 70 per cent more than his freehold pubs to serve local beer.
“The Swan is such a busy pub we do okay. But we often get accused of being an expensive pub although we are charging as little as we possibly can.”
It is hoped the new code will allow tenant pubs crippled by high rents and restricted buying policies the flexibility to survive.
He added: “The real-ale sector has been the only growth area for the past couple of years, which is great, except half the pubs in this country have a really hard time getting hold of that real ale.
“The effect of beer duty and VAT pales into insignificance compared to the impact of the beer tie.”
He said the announcement would also be good for consumers, because tied pubs’ prices pushed up prices across the industry.
“Time and time again, governments have backed down from intervening and 60 to 70 MPs voted a year ago to take measures, but then they didn’t do anything,” he said.
“The sad thing is that in the meantime, people have gone out of business, lost their pub and lost their home.”
The Campaign For Real Ale (CAMRA) said the announcement would safeguard the future of many thousands of community pubs; 3,500 tied pubs have closed since 2009.
The Government will start formal consultation on the proposals in the spring.