Pub companies report healthy profits but what can Government do to halt the decline of the Great British Pub?

Nik Darlington 10.14am

The Campaign for Real Ale (CAMRA), which has 130,000 members, has been lobbying the Government to require pub companies to offer genuinely tie-free and guest beer options to pub lessees. CAMRA chief executive, Mike Benner, says the Government is acting too weakly to save Britain’s pubs:

The Government has been cavalier in rejecting the recommendations of the Business Select Committee and instead putting its faith in the ability of the very companies accused of malpractice to finally put their house in order.

We are pleased the Government has recognised the serious problems of unfair practice in the relationship between the large pub companies and lessees but deeply disappointed that they are proposing only a weak package of reforms. Given repeated broken promises from the pub companies, consumers and publicans will no doubt be highly sceptical whether much of this will be delivered.

The Government hasn’t exactly rejected the Business Committee’s recommendations, though Ministers have refused to act based on what they say is conflicting and weak evidence.

The overriding notion from the Government is that self-regulation ought to be pursued to its full extent before the state steps in. Indeed, this should happen in most cases. The pub tie can work to the wider industry’s advantage and the challenge is not the tie itself, rather it is making the relationships between publicans and brewers function more effectively.

The Industry Framework Code will be made legally binding, which though a small step ought to be beneficial to pubs. A Pub Independent Conciliation and Arbitration Service (PICAS) will be the mediator for this Code. Again, this ought to be beneficial, though that will depend on how genuinely independent PICAS is.

A new Pubs Advisory Service (PAS) will offer free advice to all prospective and current tenants and lessees. To which, an industry cynic might ask, how much use is free advice when you only have recourse to industry bodies that may or may not be on your side?

Ministers may dispute the effects of the pub tie on the industry, but if this plan for tighter self-regulation is shown still to be failing pubs and favouring pub companies, the Government should take a more active role. Pubs, collectively speaking, are part of a great British institution.

Twenty-five pubs are closing every week in this country. At its most basic, this challenge is not so much about who owns the pub - whether it’s a free house or tied - rather it is about whether people are visiting pubs at all.

Prior to this year’s Budget, I blogged about the Treasury’s unhelpful sleight of hand over beer duty. The Chancellor wanted to be seen to be helping pubs while balancing the need to encourage more responsible drinking. Perhaps as a gesture it succeeded but in policy terms it was typical Treasury elusion. The cost of drinking out relative to drinking in the home is still steep.

Encouragingly, based on financial figures from the major pub companies, punters are still venturing out for a pint. Greene King, Marston, Mitchell & Butlers, Young’s and Fuller’s all reported rising sales and profits today. As the darkness draws in, seasonally and economically, Britons are “seeking solace in the pub”.

So people are visiting those tied pubs run by the bigger chains, largely because they can stomach the rising input costs better than many smaller free houses. They can also afford prime locations. These are challenges that tighter regulation of the pub tie cannot solve.