FSB urges government to abolish pub company tie

28th August 2009, 10:22am

One in eight tied pubs are struggling to survive, hit hard by inflated prices of beer imposed on them by the Pub Company (Pubco) that owns them, according to a new report by the Federation of Small Businesses (FSB).

In a survey of the FSB's publican members, one in eight said they are paying up to 50% or more for beer compared to untied pub owners who buy their products on the open market. They are then forced to pass these inflated charges to the customer to make ends meet.

Another 85% said that high beer prices imposed on them by the Pubco is a problem for their business and nearly three quarters (73%) said they would support a complete removal of the tie.

The FSB believes the tie is the principle reason for over 50 pub closures a week and is urging the Government to take action now to save the country's tied pubs.

Over the past year, 2,377 pubs have closed; now at least seven close every day. Pub closures not only affect the tenants and their families, but the wider community – more than 600,000 people rely on their local pub for employment, yet over the past year 24,000 people have lost their jobs due to closing pubs.

The FSB urges the Government to abolish the tie where it does not give tenants the opportunity to make a fair profit, create an independent Ombudsman who will support and advise tenants in conflict with their Pubco that cannot be resolved, and enforce fully transparent rent reviews through a statutory code.

Clive Davenport, trade and industry chairman, Federation of Small Businesses, said: "Tenanted pubs are being crippled by high beer prices: one in eight tenants are paying 50 per cent or more for their beer because of the inflated prices imposed on them by the Pubco. This then has to be passed onto the customer for the pub to survive. 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."

He added: "Tenanted pubs are not being given a fair deal from the Pubcos that own them: nearly one in six say they do not receive enough business support and a further seven out of ten 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 forever."

Related Articles:

• 04 Jan 2010 - Pubco tied tenants will ballot for strike action in 2010
• 04 Jan 2010 - Pubco tied tenants will ballot for strike action in 2010
• 08 Jul 2009 - FSB calls for urgent help for pubs risk closure
• 26 Sep 2008 - FSB calls for beer ties to be scrapped

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