Greg Mulholland: Let’s serve up a fair deal for our local pubs

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FOR those who travel on the delightful Blubberhouses to Otley road, the attractive Yorkshire stone pub in Newall with Clifton is a familiar sight. The Roebuck, as it is again called, also known as the Spite due to a feud between neighbouring pub landlords, has served as a stopping point for travellers as well as a community pub for many years.

Yet in 2010 it appeared it might have shut for the last time. The pub, then owned by a giant leased pub company, had gone through a series of tenant failures and management companies. It was in dire need of investment, an all too typical case of a failed large leased pubco pub. The future for the Roebuck seemed bleak.

Luckily, however, this famous pub was bought by local businessman Chris Payne, who runs the popular Korks restaurant and live music venue in Otley. He and his business partner invested heavily in the pub, adding a new sun terrace and Yorkshire stone extension in keeping with this old and valued pub. The car park that had been full of potholes now tarmaced and full of cars of families enjoying excellent Sunday lunches and evening meals of local produce.

Similarly, just over the Chevin in Yeadon, Graham and Barbara Yellow, who also run the popular real ale paradise the Hunter’s in Pool-in-Wharfedale, bought the ailing White Swan from another leased pub giant. Before, a tired pub with unhappy lessees, it is now a thriving free house doing packed out Sunday lunches and a booked out bed and breakfast popular with travellers using the nearby Leeds Bradford airport.

So what has changed? Not only good, passionate licensees and business peopl e, but a different business model. The sad reality is that the biggest reason for pub closures in the UK is down to the unfair terms imposed by the large leased pubcos.

The reality of the business model was exposed to me when, just a few years before its closure and sale, the previous licensees of the then Spite had enquired about buying the pub, hoping to take it on and run it themselves rather than having a lease. They had the pub independently valued and put the price to the pub company, which came back with a price which was three times the actual value of the pub. The tenants left not long afterwards, sick of being forced to buy beer at hugely inflated prices and without getting a fair rent to compensate.

The point is in the overvaluation. The giant leased pubcos overvalued their estates to the tune of hundreds of millions of pounds and recklessly borrowed against this imaginary figure. When the property market collapsed, each of the two largest pubcos found themselves in eye watering debt of over £3bn each.

As ever, those at the top got very rich, yet as the debts piled up the only way to recoup this money was to extract more and more from the small businesses, the pub.

This is why a coalition of nine organisations, including the Federation of Small Business, Forum of Private Business and the Campaign for Real Ale, have come together to launch the Fair Deal for Your Local campaign.

It calls for much needed reform of the tied model operated by large pub owning companies and an end to large pubcos charging the unreasonably high rents and beer prices that have damaged and closed thousands of pubs up and down the country.

Around one-third of pubs in the 
UK are owned by pub companies 
and are contractually obliged to buy their beer only from the pubco, preventing pub licensees buying on 
the open market – this is known as 
“the tie”.

The Government has committed to introducing a statutory code of practice for the large companies that will enshrine in law the long accepted but largely ignored principle that the tied licensee should not be worse-off than a free of tie licensee.

The Fair Deal for Your Local campaign believes that the best way to ensure a fair deal for pubs – and to deliver the Government’s clear commitment – is to include in the statutory code an option for tied publicans to only pay a fair, independently assessed market rent to the pub owning company – a “market rent only”option.

This is a simple, cheap-to-administer and market-based solution that would simply give tied licensees a choice. Importantly, all family brewers would be excluded as the code would only apply to companies who own more than 500 pubs.

This much needed reform will bring down the cost of a pint in a pubco-owned pub and allow many pubs to survive and thrive. A market rent only option would also lead to fairer access to the pub market for small brewers and cider producers which will increase choice at the bar.

So next time you visit the thriving Roebuck or the busy White Swa n and savour a pint of impressively fine ale in attractive surroundings, reflect that these pubs could have been lost for good due to the leased pub company business model.

Instead, see the bright future for thousands of local pubs. A bright future if at last the overcharging is outlawed, the under investment a thing of the past. That is why we must now get a Fair Deal for Your Local.