Will government reforms to the pub industry help struggling landlords tied to pub companies in Norwich?
©Archant Photographic 2009
Love your Local reporter DAVID BALE investigates whether government plans to curb the power of PubCos will help or hinder the pub industry.
Government plans to help pub tenants who are tied to often unsympathetic pub companies have received a mixed response from Norwich publicans.
The Department for Business, Innovation and Skills has published its response to the Select Committee’s report on PubCos. It hopes that by making the industry code legally binding – and therefore enforeceable through the civil courts – it will end the abuse of tenants by PubCos and safeguard the future of pubs.
The new code would end unfair practices, abolish the enforcement of upward-only rent reviews and force PubCos to be transparent with their lessees on issues such as charges for dilapidation repairs and income from gaming machines, it said.
Tenants will also have the information and professional advice they need to negotiate fair rents with their landlords.
But the GMB union for tied pub tenants said abuse would continue and pubs would continue to close as high rents have driven up the price of drinks pubs have to charge.
The Evening News has urged people to return to pubs in our Love Your Local campaign.
Throughout the campaign many landlords tied to PubCos, who often have to pay excessive prices for their beer compared to non-tied pubs, have complained about insufficient financial support and help from the PubCos. As previously reported, Patrick Cutter, former landlord at the Bull in Hellesdon, said he was forced out over a dispute over rent with owner, Enterprise Inns. Norwich publicans today broadly welcomed the plans, but Mike Lorenz, who owns the Whalebone in Magdalen Road, said that all landlords wanted was a fair deal and a chance to prosper.
He said: “The licensed trade will totally support an independent reform of the current lease and rental system, specifically relating to “fair rents” and in many cases unrealistic criteria used by the landlords at rent reviews.
“The additional access to an independent arbitrator and advisory service will also be welcomed. Many quality licensees have been forced out of business due to heavily imposed conditions within a lease and the seeming lack of desire by some landlords to fairly support “The Partnership” as it is often sold.”
Meanwhile, Nick De’Ath, landlord at the Unthank Arms in the Golden Triangle, said he welcomed any changes which made it easier for tenants to negotiate terms with their landlords. He said: “This legislation does seem to require more transparency on the part of the PubCos.
“If they use the ‘spirit’ of the reforms to agree fair and achievable rents with their tenants and to be prepared to have open-minded discussions when things aren’t going well then it should provide an improved level of certainty to landlords and tenants.
“Large companies will always have the upper hand if tenants want to make any changes to their rent/tenancy agreements via a ‘legal’ route. Leases are written largely to benefit the PubCos and in many cases people enter into a lease without taking the right professional advice and without reading all the ‘small print’.”
Sue Coleman, landlady at the Punch Taverns-owned Stanley in Magdalen Road, said that transparency was the main issue facing tenants.
“The trade is currently finding it hard to get new people in, and transparency would help with that,” she said. “Larger PubCos are more aware of what they should be doing for their tenants, but smaller PubCos entering the business should also be within the umbrella.”
Dawn Hopkins, landlady at the Ketts Tavern in Ketts Hill and the Rose in Queens Road, said the test would be whether it helped pubs to stay open.
She added: “It seems that some PubCos use bullying and underhand tactics, and certainly do not care about their lessees, their pubs or the communities they serve.
“It is about time their practices were looked at in more detail. Although, this report doesn’t even seem to be scraping the surface of what PubCo lessees have to put up with.”
Phil Cutter, landlord at the Murderers in Timberhill, said it did not go far enough to redress the balance on the PubCos/tenant relationship.
He said: “I have a genuine fear that, the small ‘ray of light’ that this inquiry gave to tenants, will now be the final nail in the coffin for them.
“There have been two previous commissions to deal with this specific set of issues, and resulted in no relief for tenants, therefore there is no evidence to prove that this third set of findings will be either implemented or acted upon by the PubCos who continue to haemorrhage money, as their share prices plummet.”
The government plans also include a Pub Independent Conciliation Advisory Service to be set up to provide mediation and arbitration, and a three-yearly reaccreditation process for company codes. A new Pubs Advisory Service will also be established to provide free advice to all prospective and current tenants and lessees.
For more stories from the Love your Local campaign go to www.eveningnews24.co.uk/loveyourlocal
How is your pub celebrating Christmas? Call reporter David Bale on 01603 772427 or email email@example.com