Cut pub ties to stop brewers' exploitation - FSB
THE Government should sever the restrictive ties between brewers and the pubs they own to prevent tenants going out of business, a Huntingdonshire business leader says. Malcolm Lyons, Huntingdonshire chairman of the Federation of Small Businesses, believe
THE Government should sever the restrictive ties between brewers and the pubs they own to prevent tenants going out of business, a Huntingdonshire business leader says.
Malcolm Lyons, Huntingdonshire chairman of the Federation of Small Businesses, believes the high charges imposed by brewers on tenants - which must then be passed on to customers in higher prices - are one of the main reasons for business failures in the sector.
A new FSB report says one in eight tied pubs is struggling to survive because of the inflated price of beer.
In a survey of the FSB's publican members, one in eight said they were paying up to 50 per cent more for beer compared to untied pub owners who bought their products on the open market. They are then forced to pass these inflated charges to the customer to make ends meet.
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Another 85 per cent said that high beer prices imposed on them by the brewer was a problem for their business, and nearly three quarters (73 per cent) said they would support a complete removal of the tie, Mr Lyons said.
The FSB believes the tie is the principal reason for over 50 pub closures a week and is urging the Government to take action now to save the country's tied pubs.
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"Over the past year, 2,377 pubs have closed. Now at least seven close every day," Mr Lyons explained.
Tenanted pubs have been struggling with high rents and hikes in the price of alcohol, enforced on them by the owners. In the survey, 87 per cent of tenants said that the tie was a problem for their business and nearly 80 per cent of tenants said that the transparency in rent reviews was an issue.
The FSB is urging the Government to abolish the tie where it does not give tenants the opportunity to make a fair profit, to create an independent Ombudsman to support and advise tenants in conflict with their owners that cannot be resolved; and to enforce fully transparent rent reviews through a statutory code.
Mr Lyons said: "Three-quarters of tied tenants said they would support a complete removal of the tie, so we must see change. The tie must be abolished.
"If action is not taken now, the great British pub will become extinct - leaving the next generation unable to visit a traditional pub. The dramatic number of pub closures is affecting not only the tenants and their families but the wider community - 24,000 people lost their jobs over the past year.
"Tenanted pubs are not being given a fair deal by the companies that own them: nearly one in six say they do not receive enough business support and a further seven out of 10 are left to their own devices once the contract has been signed. The FSB is calling on the Government to introduce an independent ombudsman and a statutory code to ensure transparency at rent reviews. Without urgent action, we could see the pubs at the heart of our communities disappear for ever.