The review of the Pubs Code and the activity (or lack of it) of the Pubs Code Adjudicator (PCA) mentioned in the last edition is coming to an end as we go to print. Consequently I was expecting this to be a quiet period for news on this front but I was wrong.
After three years in operation, the PCA has launched his first investigation. Better late than never. It is alleged that Star Pubs and Bars, Heineken’s pub operation, have been coercing tenants who have gone ‘free of tie’ into continuing to stock only Heineken’s keg products, which does somewhat defeat the object. The deputy adjudicator, Fiona Dickie, said that Star’s alleged practices may have disadvantaged publicans and raised the price of a pint. Star maintain that the legislation gives them the right to ensure that the pubs that they own sell their beer and cider and that ‘the new legislation is complex and not clearly defined in the Pubs Code‘. They will, of course, cooperate fully with the investigation ‘whilst robustly defending our position’. The PCA has asked for Star tenants to contact them with details of any problems.
CAMRA’s National Chairman Nik Antona said, “CAMRA welcomes the news that the Pubs Code Adjudicator is finally using its power to launch an investigation; something we have called for in our continuing campaign to get the Pubs Code working as intended. An investigation and ruling from the PCA will help provide clarity on Market Rent Only (MRO) terms from one pub company but we need wider investigations on whether all pubcos are abiding by the spirit of the Code. We want to see greater enforcement powers for the PCA to deter pub companies from unfair and unlawful behaviour in the first place. It is clear that the Pubs Code is not working. CAMRA is leading the fight to get meaningful changes introduced by talking directly to licensees, when the PCA has admitted they can’t. We are currently surveying tied tenants and we expect that the results will illustrate ongoing issues with the Code and provide a compelling case for reform.”
Since the Code came into force, CAMRA has heard a number of complaints about its effectiveness. As Nik says, in order to ensure the views of affected tenants are heard, CAMRA has launched a survey to coincide with the Government’s review of the Code. Nik had explained previously, “The Pubs Code Adjudicator has told us a number of times that his office struggles to contact tenants directly and relies on pub companies to act as a conduit. This is clearly not an effective way to get the honest views of tenants, which is why we are going straight to the source to find out if the Code is really working as intended. We’ll be submitting the survey results to the Government. I expect the results will show what we have suspected for a long time now; that the Pubs Code needs some serious reform to make it fit for purpose and deliver for tenants.”
The PCA has decided to set up an ‘advisory group’ to examine the contentious issue of dilapidations. Most tenants have ‘full repairing’ leases which mean that they are responsible for all repairs and maintenance, internal and external. When a lease expires, even if it is going to be renewed, the landlord, in this case the POB, produces a schedule of works that they say need to be carried out and for which the tenant must pay. This can often be very expensive. Tenants and their representatives, such as the British Pub Confederation (BPC), feel that they have compelling evidence that these provisions are abused by the POBs. However, the PCA spoiled what could have been something positive by appointing the British Beer and Pub Association, in effect the POBs’ trade body, to lead the group. For obvious reasons, the BPC vehemently objected to this and the issue remains unresolved.
Finally, I have previously mentioned the case of Gary Murphy, the landlord of Ye Olde Mitre Inne in Barnet and his problems with his POB, Greene King. In July 2017, the PCA issued a Statutory Advice Note which supported the practice of POBs insisting on an arbitration procedure whenever a tenant requested to change to a ‘market rent only’ (MRO) agreement and for which the tenant had to pay, at a cost of up to £20,000. It also meant that during the arbitration period, the tenant had to continue paying the full rent instead of the MRO one. Believing this was wrong, Gary took on not only GK (who accused him of being vexatious) but also the PCA, who had supported GK and ordered Gary to pay their costs. Gary’s tenacity, not least his crowdfunded threat of legal action, has led to the PCA now withdrawing the 2017 notice and issuing a very different replacement. On 1 August CAMRA’s Enfield & Barnet branch are holding a ‘Celebrate for Gary’ social. Well deserved.
Let us all hope that the outcome of the review will be an end to all this, and that, as originally envisaged, ‘the tied tenant shall be no worse off than the free of tie’.