Heineken-owned Star Pubs & Bars has been fined £2 million by the Pubs Code Adjudicator (PCA) after investigations found it broke the rules for over three years by forcing tenants to sell “unreasonable levels” of its own beers and ciders. The group, which operates over 200 pubs across Scotland, is considering appealing the ruling.
At one point, a total of 96 tenants who requested a free-of-tie option were told that 100% of the keg beer they sold had to be Heineken brands, while Edinburgh-based Star Pubs & Bars insisted that its own code compliance officer must “ensure the code is interpreted to the commercial benefit of Heineken UK”, the report said.
It also reported that Star Pubs & Bars “failed to heed statutory advice, the PCA’s regulatory engagement and learnings from arbitration awards. It did not engage frankly and transparently with its tenants or meet the standards required of a regulated business when engaging with the PCA.”
Star Pubs & Bars Managing Director Lawson Mountstevens said, “We are deeply disappointed and frustrated at the outcome of this investigation. There are many aspects of the report that we fundamentally disagree with and we are actively considering an appeal. This penalty is unwarranted and disproportionate, and comes at a time when the entire sector is in serious financial crisis as we work around the clock to support our pubs and licensees to keep their businesses afloat.
“We are a responsible business that takes its regulatory obligations extremely seriously and strives to achieve the highest levels of professionalism. From the outset we have been transparent and repeatedly sought guidance from the regulator on the terms we were offering those licensees looking to take up the Market Rent Only (MRO) option, but the PCA consistently declined to respond to those requests. Instead it chose to launch a long, costly and unnecessary investigation.
“We are dedicated to the Pubs Code in both word and spirit, and do not believe the outcome of this investigation accurately reflects the culture of our business or the good working relationship we have with the vast majority of our licensees. In our view there are flaws in the way the statutory framework is applied, and we call on the Government to examine this as part of their statutory review.”
Emma McClarkin, Chief Executive of the British Beer & Pub Association, said,“All of the regulated pub companies are committed to the Pubs Code, both in word and spirit. However, we do believe there are issues and inconsistencies in the way the statutory framework is applied, including a lack of adequate guidance, which we hope the Government will explore in its statutory review.”
The investigation, the first ever for the PCA, covers the period between 21 July 2016, when the pubs code became law, and 10 July 2019, with 12 breaches were identified in total.