SLTA and brewers call for legislation against tied pubs

Brian Calder 2235

The Scottish Licensed Trade Association has teamed up with Tennent’s, and some smaller brewers, with the aim of getting legislation against tied pubs passed in the Scottish parliament. The move follows the passing of the Small Enterprise Bill in England and sees both organisations provide research to MSP’s at the Scottish Parliament, ahead of a debate on the subject, which is planned for 30th April. 

The research, compiled from information from CGA and from CAMRA, suggests that over the last two years tenanted pubs across Scotland are sixty-two times more likely to close than their free trade counterparts – this figure was taken from CGA, Draught Beer stockist in 2 years to 27.12.14.

In the research paper ‘CGA, Scottish Tied Pub Licensee Survey, 2014’,  74% of Scottish publicans felt worse off as a result of the tie, and more than 96% believe that paying a reduced rent didn’t fully take into consideration the extra cost they bear on tied products and services. Free trade revenues for Draught Beer grew by +6%, whilst in Leased and Tenanted outlets,  declined sales by -4% according to CGA, Sales in MAT to 27.12.14.

Paul Waterson, Chief Executive of the Scottish Licensed Trade Association (SLTA) said, “Not only do pubco companies create an unfair, uncompetitive marketplace, they also have a serious effect on the economy and the fragile health of the licensed industry. For tied premises to be sixty-two times more likely to close than their free-hold neighbours is extremely concerning and we need to turn that tide.”

However some licensees feel that there is merit to the tied-house deal. Says Iain Pert, of Edinburgh-based PG Taverns, who have a few leases, “We all want to be able to cut costs and buy cheaper beer and more flexibility in the beer tie could be helpful.  However, critics ignore the positive aspects of the tie. I am seeing major investment coming in to pubs which is so important for the future of the trade.  My experience is that working with the right partner can really make a difference and drive sales

Action is also backed by a collective of brewers, including Harviestoun, Fyne Ales, Tennent Caledonian Breweries and Williams Bros.

Tennent’s boss, Brian Calder told DRAM, “We’ve been heavily involved in the debate surrounding tied pubs legislation, which we feel places real restrictions on both Scottish brands and publicans alike. Forcing tenants to buy stock at a price which is barely viable from a restricted range is hurting Scottish Pubs and simultaneously puts producers, including wonderful craft brewers, at a disadvantage, as the number of operators they can sell to is severely limited.  We will continue to call for government action on this issue as we hope to bring Scottish legislation into line with that of English and Welsh systems. Once this change takes place, those operating in the Scottish market will see a positive change in their business.”

While Scott Williams of Williams Bros commented, “So far, meetings with political representatives have been positive. But, alongside many others in the industry, we’re keen to maintain momentum and see action take place. If we delay then we place Scotland at a serious disadvantage.”

A motion for change has been put to the Scottish Parliament. Having gained cross-party support, it will now be debated in Holyrood on 30th April.

Paul Martin MSP (Labour) who raised the motion said, “While this is great news for rent tied pub tenants south of the border, pubs in Scotland are now in a very vulnerable position. We urgently need similar legislation in Scotland to ensure that pub tenants get a fair deal. A tied licensee should not be worse off than a free-of-tie licensee and we need a robust code of conduct and an adjudicator to ensure that pubcos are not exploiting tenants”.