Ceredigion’s Welsh Liberal Democrat MP Mark Williams has welcomed yesterday’s victory in the House of Commons by the Fair Deal for Your Local campaign, which saw MPs vote to defeat the Government 284 votes to 269 to introduce a market rent only option for thousands of licensees publicans across the country who are tied to large pub companies. MPs from all parties voted in favour of a new clause to the Small Business Bill, of which Mark Williams was a signatory.
This will now empower pubco licensees to choose between a tied agreement and a market rent only agreement; allowing them to buy beer on the open market. Publicans could now see the price they pay for beer fall by up to 60p a pint. As a result we could see cheaper pub prices for customers, more investment in pubs and ultimately fewer pub closures.
Around a third of pubs in the UK are owned by large Pub Companies – property companies who lease pubs out to tenants to run as their own business. These pubs are contractually obliged to buy their beer only from the Pubco preventing pub licensees buying on the open market – this is known as the beer tie.
Pubcos make huge excess profits by using the beer tie to force licensees and ultimately the consumer to pay high prices. Licensees can pay at least 50% more for beer than a free-of-tie publican. Alongside this, pubco licensees often find themselves paying above market value rents. Market rent only is a simple, market based solution what would allow tenants of the large pub companies the right, at rent review or renewal, to ask for an independent assessment of their rent without tie obligations, then have the option to pay this to the pub owning company - or to opt for a fair tied agreement with a lower rent being offered in exchange for higher beer prices.
Commenting Mark Williams said;
‘This was a huge victory for pubs, and a huge victory for democracy. It been an issue which many have campaigned on for years, including CAMRA, The Federation of Small Businesses, and the Fair Pint campaign, and I have long been a supporter of their plight. I was therefore more than happy to add my name to this clause, and I was delighted yesterday when this crucial vote was won. We can now ensure that publicans have a market rent option which will stop the pubcos’ hugely marked up beer prices and excessive rents.
‘This should make a real positive difference to many hardworking publicans across the UK. I hope we see many more sustainable pub businesses, and a cheaper pint of beer free from the pubco price escalator for our local communities and consumers to enjoy.’