Well, the cat is out of the bag. The Business and Enterprise Select Committee’s report on the pubcos makes for uncomfortable reading for the government. The committee are highly critical of the relationship between pubco and tenant and were “surprised and disappointed” by the OFT’s refusal to re-examine the beer tie’s impact.
They also criticise the ludicrous (my words) and anti-competitive practice of pubcos selling sites with restrictive clauses, saying “We believe it is for the market to decide whether a pub is unviable and not for a pubco to restrict a building's use.” Exactly.
It’s important to stress that the committee don’t recommend doing away with the tie completely, but are calling for major reforms. These include greater transparency over rent-setting and an independent dispute resolutions system. They are urging the government to launch a Competition Commission inquiry-now that would be interesting.
Rather predictably, pub bandits Punch are unhappy with the report’s findings. Their spokesman claimed that “the tied pub model provides a fair and equitable approach to sharing risk between ourselves and our licensees.” And that “it represents a low cost opportunity for entrepreneurs.” He should team up with Jacqui Smith. They would make a great double act on the comedy circuit.