Federation of Small Businesses (FSB) figures show that over 70% of pubs feel the new code of practice started to give them a better deal will not improve their overall relationships with their owners. Tenanted pubs have for a long time paid higher beer prices and higher rents to the pubcos. Parliamentary Committees have expresses concerns on a regular basis about these industry practices since 2004.
A revised Code of Practice was recommended to have been put in place last year by the Business, Innovation and Skills Select Committee in order to help get a fairer deal for the tenants because they were being strangled by the high beer prices and rents.
Now statistics have shown that there is absolutely nothing that has changed and the code is not working. A survey of FSB members that operates pubs shows that 69% do not have confidence that the code will improve on their business arrangement with their pubco. What the code has created is an additional financial burden for the tenant. Over 50% of those that signed the Code thought it was legally binding for both parties.
But the reality is that the code is only meant as an agreement between the two parties and tries to improve the relationship between them. The FSB is lobbying to make it a law and thereby offering the small businesses protection.
If the situation does not improve by June the Government has promised to take some sort of legislative action. This will help the tenants in their relationship with their pubcos but the FSB wants even more in order to protect the smaller firms.