LAGER brand Tennent’s is stepping up pressure on the Scottish Government to protect Scotland’s pub industry ahead of new legislation being introduced in England and Wales next month.
The Glasgow-based business wants a ‘pub code’ in Scotland to ensure pubs owned by big groups like Greene King, Punch and Enterprise are not disadvantaged by higher rent or beer costs from their parent brewer or pub company.
South of the border, the UK government’s Small Business, Enterprise and Employment Act 2015 will see the introduction of such a code on 26 May 2016 for businesses owning 500 or more ‘tied’ pubs in England and Wales.
“The on-trade in Scotland has been very vocal on this issue for many, many years,” said Alan Hay, sales director for the Scottish on trade at Tennent’s. “We need parity with England and Wales, if not better. Addressing the management of tied pubs is a key step in protecting the overall health of our licensed trade, helping to stop inflated prices and uncompetitive, unfair business.”
Tennent’s believes tied pubs that are required to buy at least some of their beer from a particular brewery or pub company are competitively disadvantaged. The company has none of its own and is part of a consortium lobbying on the issue, including the Scottish Licensed Trade Association, the Scottish Tourism Alliance, the Campaign for Real Ale and the Pubs Advisory Service. Brewers including Stewart Brewing, Harviestoun Brewery, Fyne Ales, Inveralmond Brewery, Williams Bros and Deeside Brewery are also involved.
Last May, Scottish business minister Fergus Ewing said the Scottish Government was commissioning a study to look at the various pub models operating in Scotland to see whether the tied sector was being treated more unfairly than other parts of the industry. There has been no update since.
“The Scottish Government has stated that they are listening but as yet nothing seems to be progressing,” Mr Hay said. “In the meantime, the rest of the UK has pushed on with their forward-thinking plans, to the delight of publicans. Unless action is shown soon, Scotland will be left behind, placing us in a vulnerable position.”
Under the 400-year old tie system, pub tenants are required to buy beer from their landlords rather than on the open market. They typically pay above market rates, but in return should receive benefits such as lower rent.
Under the new law in England and Wales, pub tenants will be able to ask their landlords for detailed rent assessments and will have the option to break from the tie when there is a rent review, or if product prices are unreasonably increased.
The Scottish Government said its research into the tied pub sector was expected to conclude in the autumn.
"The research will help ministers to consider whether legislation should be introduced and who it should apply to – which may be different to that identified in England and Wales, where the make-up of the sector is very different to Scotland," a spokesperson said.
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