LONDON, June 3 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
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
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)