FSB welcomes calls to give pub owners the power to break the pub company tie

Pub owners may be able to break the tie with the pub companies (pubcos) that own them, thanks to lobbying by the Federation of Small Businesses (FSB).

The FSB welcomes the Business and Enterprise Committee’s findings on pubcos, which highlights the unfair relationship between pubcos and pubs. The FSB has been campaigning for the tie to be lifted since 2004. Pub owners currently struggle with high rents and prices of alcohol forced on them by the pubcos that manage them, leaving up to 40 pubs closing each week.

The Committee’s report recognises that pubcos share the risks of running a pub with the pub owner but not the profits – around 67 per cent of lessees with a turnover of half a million said they earn £15,000 – less than the average wage. The FSB welcomes the recommendation for tenants to opt-out of the tie at the time rent reviews take place. However, the FSB calls on the Government to go further by:

• Ensuring the opt-out is written into every contract by the Pubcos and is reviewed every five years; and
• Capping pubco’s beer profits at around 10 per cent above the wholesale price.

Clive Davenport, Federation of Small Businesses Trade and Industry Chairman, said

“Pubs are not just part of the local community they hold the local community together. But we are watching over 40 pubs closing a week, which affects not just the owners and their families, but the communities around them.

“The FBS welcomes the Committee’s recommendation that pub owners be given an opt-out of the tie. This needs to be written into contracts immediately. We would then see pub owners voting with their feet and walking out of the tie in five years which means it will be effectively lifted.”

ENDS

Notes to Editors

1. The FSB is the UK’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk.

2. This forms part of the FSB’s Keep Trade Local campaign which seeks to stem the tide of business closures, reverse the trend and defend the choice and diversity customers deserve. Visit www.fsb.org.uk/keeptradelocal.

3. Pub ownership falls into one of the following categories:

– Managed Houses – these are owned by a pub company or a brewery, and employ salaried managers and staff.
– Tenanted/Leased Pubs – these are owned by a pub company or a brewery who receive rent from the licensee who run the premises as their own business.
– Freehouses – these are owned and managed by the licensee.

Contacts

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 8128 / 07917628998
Prue Watson 020 7592 8121 / 07825 125695
Marc Shoffman 020 7592 8113 / 07595 067068

For regional FSB contacts please go to www.fsb.org.uk/regions