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Farron welcomes Parliamentary inquiry into pubco power

June 25, 2008 3:00 PM

Liberal Democrat MP Tim Farron has welcomed the news that a Parliamentary Committee will take a second look at the power of the pubcos. The news comes on the back of months of campaigning by Mr Farron, who tabled a strongly supported parliamentary motion calling for the inquiry. Specifically, the Business and Enterprise Committee will be looking into whether the recommendations of the 2004 Trade and Industry Committee report on pubcos have been followed.

Mr Farron has been raising landlords concerns following a worrying period for the pub trade; in 2006-07 bankruptcies amongst pub landlords increased seven-fold, with many blaming the distorting affect pubcos have on the pub market for their concerns. As a result of the Beer Orders of 1989, pubcos have come to dominate the market, and are able to charge increased rates for rent and beer. In 2004, the Trade and Industry Committee noted this and recommended that the distribution market be kept under "close and regular scrutiny." Amongst other things, the Committee also called for greater transparency in pubco dealings and an end to the gambling machine tie. Perhaps most damningly, the Committee also demanded that the industry code of practice should be reviewed immediately, and that if pubcos did not abide by it they should face the possibility of the market being legally regulated.

Mr Farron said:

"The pubcos are not keeping their end of the bargain - they are abusing their power and this must end. This inquiry will no doubt provide further ammunition in our call for legislation of the pubcos and so help keep our local pubs open. Pubs play an important role many communities, and it would be a great shame if even more local pubs were forced to close. What we are asking for is not unreasonable; merely a fair rent and an investigation into the supply tie. This would help make a big difference to licensees, which would be fantastic for all communities that have a pub at their heart. For this reason I am encouraged by the announcement of this inquiry and will be following it closely."



The 2004 Trade and Industry Committee report into pubcos is available online, and can be found here: http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtrdind/128/12802.htm