Yahoo Finance Pub Industry Gets New Code Of Conduct
New plans to protect pub landlords against high rent and beer costs to try to shore up the ailing industry have been unveiled by the Government.
Under the proposals, a code of practice and an independent adjudicator with the power to investigate and settle disputes would be introduced.
The Department for Business, Innpvation and Skills claims the moves would ensure fair treatment and could save landlords £100m a year.
The new code would contain mandatory rules for all pub companies owning more than 500 pubs, which are the source of 90% of complaints.
It will particularly focus on stopping firms abusing the beer tie, under which landlords are forced to buy beer from the pub owner instead of on the open market.
Ministers hope the changes will also boost small British beer and ale manufacturers by opening up pubs to select independent beers.
The adjudicator would be able to impose sanctions and fines in cases of abuse - ending the self-regulation which has been in place since 2004.
The Government is putting the plans out for consultation and wants to look at whether the ownership threshold is fair.
Business Secretary Vince Cable said: "We gave pub companies every chance to get their house in order.
"But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn't working.
"Pubs are small businesses under a great deal of pressure, many of which have had to close.
"Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship."
It is claimed that more than 3,500 pubs have shut since 2009 because of overcharging for rent and beer.
Figures cited by the Department of Business suggest almost half of tied pubs - which make up 48% of all the pubs in the UK - earn less than £15,000-a-year.
At the Devonshire Arms in the affluent village of Dore in Sheffield's commuter belt, licensee Tina Gage says the new code cannot come soon enough.
The pub is a bustling community hub, but she says her landlord charges £150,000 each year for rent and the drink she sells, leaving her with no salary at all.
"There's no other business in the world where you would rent a building from somebody and they would force you to buy their product," she said.
Ten years after taking on the lease she has won a rent reduction after going to court, but says unless she makes a profit soon, this year will be her last behind the bar.
"I've got to try to turn it round this year or I will have to call it a day," she warned. "And if I go, someone else will come in and take the pub and the same thing will happen to them."
The Liberal Democrat MP Greg Mulholland, who leads the all-party Save (Milan: SAVE.MI - news) the Pub group, has campaigned for legislation to stop what he calls wholly unacceptable rents.
"The problem here is the large pub companies in this country are based on a business model of taking more than is fair and reasonable in pub profits," he said.
"The code will address that, and the key phrase is the Government have committed that a tied licensee will not be worse off than a free-of-tie licensee."
The Campaign For Real Ale (Camra) hailed the measures as "fantastic news".
Chief executive Mike Benner said: "These reforms, coupled with an industry watchdog with real teeth, are urgently needed to help safeguard the future of many thousands of valued community pubs."
But Punch Taverns, one of the pub chains that would be affected, expressed confusion at what it claimed would be a "state-backed pubs quango".
"A founding commitment of the coalition was to reduce regulation but ministers now seem intent on wrapping Britain's pubs in red tape," a spokesman said.
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