Pubs reform ‘will mean better prices for customers’

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A VOTE by MPs to reform the historic “beer tie” between tenants and pub companies will make it easier for customers to afford a pint, according to a Leeds-based pub operator.

Christian Townsley, the director of North Bar, believes the move will mean a better deal for customers and landlords. However, Enterprise Inns, Britain’s biggest pub landlord, warned that the vote could result in a fresh wave of closures and major job losses. Enterprise Inns said the successful Commons rebellion “threatens to have serious unintended consequences for publicans and the industry at large”.

The British Beer and Pub Association (BBPA) said the vote was “hugely damaging” and that the Government’s own research showed it would result in 1,400 more pubs closing, with 7,000 job losses. But the Campaign for Real Ale (Camra) said the change would secure the future of pubs, helping them to stay open and ensure the cost of a pint remained affordable. The vote saw the Government suffer its first legislative defeat - by 25 votes - as Tory and Liberal Democrat MPs rebelled against the Coalition to support an amendment to the Small Business, Enterprise and Employment Bill. It will mean pub tenants tied to big companies being able to demand a “market rent only” (MRO) agreement from them.

Currently, tied pubs exclusively buy alcohol products from the parent company in return for reduced rent on the premises and other benefits but there are widespread concerns and complaints about the abuse of the practice by big firms. Liberal Democrat MP Greg Mulholland, who proposed the reform, said it would “simply bring back market forces into a sector that frankly has become grotesquely anti-competitive”. Mr Mulholland stressed that his market rent only plans would come in gradually over five years.

Mr Townsley, of Leeds-based North Bar, added: “This is an historic development that has the potential to enable hard working landlords to see better margins and earn an income slightly more in line with the many hours they work. Not only will the change be beneficial to landlords, but it will mean that customers get better choice at better prices.”

Stephen Blake of the CMA  Photo: Vikki Ellis

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