Rules on pubs are failing tenants, MPs told

The rules governing how pub tenants are treated in England and Wales have been a failure and tenants are being let down by the Government adjudicator, MPs have been told.

Greg Mulholland, chairman of the British Pub Confederation called for the competition watchdog to probe the power of big brewers, and said the adjudicator is not engaging with independent tenants.

“The huge global brewers are getting their stranglehold on the sector, owning far too many of our traditional pubs,” he told the Business, Energy and Industrial Strategy Committee.

We have an adjudicator who refuses to properly engage with genuine independent tenant groups

“Not only happy with owning them, they then operate this extraordinary model – which is only operated in the UK and is only legal in the UK – where they can overcharge their so-called business partners for beer and other products.”

Mr Mulholland called for a competition inquiry into the current system, which he said is bad for small brewers, publicans and consumers.

He also levelled criticism at the Pubs Code Adjudicator (PCA), which governs pub groups with more than 500 tenants.

“We have an adjudicator who refuses to properly engage with genuine independent tenant groups,” he said.

The groups the regulator meets with are funded by, have membership contributions from, or have members who are the regulated pub companies, Mr Mulholland claimed.

“The PCA needs to be independent, needs to seek data themselves and stop relying on the regulated pub companies,” Mr Mulholland said.

“It’s far too cosy.

I think that it needs to be recognised that the Pubs Code in this country has been a failure. I think Scotland has benefitted from that, they have learnt from the failure of the English code

“We have an adjudicator that doesn’t adjudicate, partly because they don’t have the powers.”

He accused the PCA of turning a blind eye when companies overcharge tenants for dilapidation of the pubs and to the abuse of so-called section 25 notices, which can force tenants to move out.

“It has ignored all those issues, so frankly, what is the point of the adjudicator? Because it certainly isn’t what tenants were promised, and tenants understandably feel very betrayed,” he said.

Paul Crossman, chairman of the Campaign for Pubs, said the Pubs Code, introduced in England and Wales in 2016, has not worked as intended.

“I think that it needs to be recognised that the Pubs Code in this country has been a failure. I think Scotland has benefitted from that, they have learnt from the failure of the English code,” he said.

The PCA has been contacted for comment.

During the hearing, several pub companies denied misusing section 25 notices, and said whenever they serve tenants with them it is for legitimate business reasons.