Britain unveils new code to protect pub landlords

LONDON, June 3 Tue Jun 3, 2014 3:15am EDT

LONDON, June 3 (Reuters) - Publicans tied to Britain's big pub companies are to be given greater powers to challenge rent prices and will have a new independent adjudicator to turn to in disputes, under reforms unveiled by the government on Tuesday.

Almost half of Britain's 50,000 pubs are run by tenants under "beer-tie" agreements, in which they buy beer from the firm that holds their lease at above market prices in return for subsidised rent or other benefits.

Publicans, however, have complained of unfair treatment from landlords, with many saying they earn less than a national minimum wage equivalent salary of 10,000 pounds ($16,800) a year.

In response lawmakers have since January last year pushed for a statutory code to ensure big pub companies stick to the agreement and do not hike rents too high.

"Far too many landlords feel their income is squeezed by big pub companies. So today we are taking action to make sure they get a fairer deal," Business Secretary Vince Cable said.

Under the reforms, tied tenants can request a rent review if they have not had one for five years and will also have access to the information pub companies have used to decide to increase rents.

An adjudicator will have the power to provide redress where the code has been breached and impose sanctions including financial penalties for systemic breaches.

Publicans in rent dispute with firms with 500 or more tenanted pubs, such as Enterprise Inns, Greene King and Punch Taverns, will also have the power to request an assessment to show whether they are worse off than their free-of-tie counterparts.

Some campaigners had asked for a more radical mandatory market rent-only option to be included in reforms, but ministers said there was insufficient support to proceed with that idea.

While the government says the code would save tenants thousands of pounds a year, big pub firms have argued it will lead to reduced investment, resulting in increased pub closures and shutting off the industry to new entrants seeking a low cost way to enter the market.

As many as 26 pubs close every week in Britain. ($1 = 0.5968 British Pounds) (Reporting by Neil Maidment; Editing by David Holmes)

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