The Scottish Beer and Pub Association is calling on MSPs to reject the proposed Tied Pubs Bill when it is voted on next week in the Scottish parliament because if passed it threatens to stifle much needed future investment in the wake of the pandemic.
The Bill seeks to strengthen the position of Scotland’s tied tenants in their dealings with pub owning companies but it has already been voted against by MSPs on Holyrood’s Economy, Energy and Fair Work Committee which the Bill’s author, Labour MSP Neil Bibby, called ‘a slap in the face.’ If it is voted against next week, it will be thrown out for good.
Said Emma McClarkin, Chief Executive of the Scottish Beer & Pub Association, “This Bill is not evidence-based, and far from helping Scotland’s pubs, it poses a real danger to future investment in the sector, entrepreneurship opportunities, threatens jobs and it should be resoundingly rejected by MSPs.
“Covid-19 has decimated the pub sector in Scotland. Pubs directly support over 45,000 jobs in Scotland and many of them face an uncertain future as they struggle to get back on their feet and adapt to the changing circumstances that Covid-19 presents.
“Pubs need support from MSPs, not legislation that misunderstands the Scottish market and has already been found to be unnecessary by an independent report commissioned by the Scottish Government and the Scottish Parliament’s Economy Committee.
“The fact is, this Bill was ill conceived before Covid-19, but it would be economically ruinous to the sector if it was passed in the current circumstances and it is vital that all MSPs show their support for Scottish pubs by voting this Bill down at Stage 1.”
But this has divided the trade with Scottish Licensed Trade Association (SLTA) spokesperson Paul Waterson calling the rejection of the bill by the committee “unforgivable”.
He said, “The SLTA are bitterly disappointed by the Economy Committee’s report. We don’t see how anyone can justify opposing legislation in Scotland when there was cross-party support from the SNP, Conservatives, Labour and others in Westminster for legislation to protect tied licensees in England and Wales.
“Failure to support Scottish tenants at a time when the whole industry is in crisis is unforgivable and Scottish tenants are very much the poor relations.”
Pubs tenants have also urged MSPs to save their pubs by voting against the Tied Pubs Bill.
Operator Andrena Bowes, who is tenant and operator of seven pubs in the Edinburgh, the Lothians and Fife said, “The coronavirus has devastated the pub sector and politicians should be focused on that, not wasting time on proposals which aren’t wanted and definitely not needed.
“As a tenant under the tied model, I can speak personally of its success and joint-partnership model, which sees a sharing of the risks and rewards.
“During the pandemic, my pub company has provided constant advice, support, reimbursement for unusable stock and have also reduced rent, which without would have forced us to close our doors for good.
“The news that this proposal is even being considered in light of the pandemic makes you want to cry. Hospitality businesses are begging for meaningful economic support that could save their livelihoods and jobs of their staff, and politicians are wasting time discussing technical rules which impacts a tiny minority of pubs.
“Above all, pubs need certainty, but Neil Bibby’s bill removes what little certainty we have at this time. MSPs can give a little bit back by voting against the Tied Pubs Bill next week.
“MSPs of all parties need to stop playing politics and start saving pubs.”
The Scottish Beer and Pub Association is calling on MSPs to reject the proposed Tied Pubs Bill when it is voted on next week in the Scottish parliament because if passed it threatens to stifle much needed future investment in the wake of the pandemic.
The Bill seeks to strengthen the position of Scotland’s tied tenants in their dealings with pub owning companies but it has already been voted against by MSPs on Holyrood’s Economy, Energy and Fair Work Committee which the Bill’s author, Labour MSP Neil Bibby, called ‘a slap in the face.’ If it is voted against next week, it will be thrown out for good.
Said Emma McClarkin, Chief Executive of the Scottish Beer & Pub Association, “This Bill is not evidence-based, and far from helping Scotland’s pubs, it poses a real danger to future investment in the sector, entrepreneurship opportunities, threatens jobs and it should be resoundingly rejected by MSPs.
“Covid-19 has decimated the pub sector in Scotland. Pubs directly support over 45,000 jobs in Scotland and many of them face an uncertain future as they struggle to get back on their feet and adapt to the changing circumstances that Covid-19 presents.
“Pubs need support from MSPs, not legislation that misunderstands the Scottish market and has already been found to be unnecessary by an independent report commissioned by the Scottish Government and the Scottish Parliament’s Economy Committee.
“The fact is, this Bill was ill conceived before Covid-19, but it would be economically ruinous to the sector if it was passed in the current circumstances and it is vital that all MSPs show their support for Scottish pubs by voting this Bill down at Stage 1.”
But this has divided the trade with Scottish Licensed Trade Association (SLTA) spokesperson Paul Waterson calling the rejection of the bill by the committee “unforgivable”.
He said, “The SLTA are bitterly disappointed by the Economy Committee’s report. We don’t see how anyone can justify opposing legislation in Scotland when there was cross-party support from the SNP, Conservatives, Labour and others in Westminster for legislation to protect tied licensees in England and Wales.
“Failure to support Scottish tenants at a time when the whole industry is in crisis is unforgivable and Scottish tenants are very much the poor relations.”
Pubs tenants have also urged MSPs to save their pubs by voting against the Tied Pubs Bill.
Operator Andrena Bowes, who is tenant and operator of seven pubs in the Edinburgh, the Lothians and Fife said, “The coronavirus has devastated the pub sector and politicians should be focused on that, not wasting time on proposals which aren’t wanted and definitely not needed.
“As a tenant under the tied model, I can speak personally of its success and joint-partnership model, which sees a sharing of the risks and rewards.
“During the pandemic, my pub company has provided constant advice, support, reimbursement for unusable stock and have also reduced rent, which without would have forced us to close our doors for good.
“The news that this proposal is even being considered in light of the pandemic makes you want to cry. Hospitality businesses are begging for meaningful economic support that could save their livelihoods and jobs of their staff, and politicians are wasting time discussing technical rules which impacts a tiny minority of pubs.
“Above all, pubs need certainty, but Neil Bibby’s bill removes what little certainty we have at this time. MSPs can give a little bit back by voting against the Tied Pubs Bill next week.
“MSPs of all parties need to stop playing politics and start saving pubs.”
Belhaven and Greene King’s tied tenants will now see their rents reduced by 90% from 11 June until they can legally reopen. Greene King Pub Partners revealed the news in an announcement today (21 May).
The 90% concession will continue during the first four weeks that a pub can legally reopen and then remain at 50% for the following four weeks, meaning support will run almost up to September at the earliest. As well as the rent concessions, the announcement also confirms that tied tenants will receive eight weeks of trade support when buying barrels of beer or cider from Greene King after they reopen.
The decision follows the first wave of financial support from Greene King Pub Partners that covered the initial 12-week period from 18 March to 10 June.
The first wave of support involved the launch of a Partner Support Fund and one-to-one discussions with all 975 tied pubs to understand their immediate financial situation and ascertain which pubs needed immediate rent concessions as they had not been eligible for any government grants. Pubs with a rateable value under £51,000 have been eligible for a government grant up to £25,000 to allow businesses to continue paying fixed costs, such as rents.
So far approximately £4m of rent concessions has been made by Greene King Pub Partners through its support fund to tied tenants to cover the initial 12-week closure period.
This latest additional support comes as Greene King continues to work with trade associations on making the case to government that further government support for the hospitality sector is needed as companies try to keep up with accumulating fixed costs while businesses remain closed.
All rents have also been deferred for Greene King tenants since 17 March while pubs are closed and then further support has been rolled out in stages as the national situation developed and government support has been used up.
Wayne Shurvinton, managing director of Greene King Pub Partners, said: “From the outset balancing as much support for our tenants as we possibly could alongside ensuring the long-term survival of Greene King has been our priority.
“By deferring rents before pubs were ordered to close we removed any immediate cashflow concerns for our partners and since then have reassured them that we would support them in every way possible when it came to rent and I’m very pleased to announce these latest measures today.
“None of us are immune to the financial implications of pubs closing and we all have to work together to survive this existential threat to our industry. I’m grateful to every single one of our tenants who has worked with us and trusted that we were doing all we could to look after them.
“We feel we’ve played our part and it is critical the government continues to play its part in supporting our sector. The support so far is extremely welcome but as a tenant ourselves with over 500 landlords, we have not received rent concessions in the way we are offering them to our tenants and further support on rent payments is needed to support the recovery of the pubs sector.”
On 25 March http://www.greeneking.co.ukGreene King Pub Partners also pledged to replace all unopened kegs and casks in tenants’ cellars that will be out of date when it comes to reopening. Tenants have completed a stock survey of what barrels will need replacing and it is estimated the total cost of this support will be approximately £1.3m + VAT.
A number of Scottish organisations and brewers have formed a coalition to fight against tied pubs and pubcos and the matter was discussed in parliament yesterday. Following this, the Scottish Government has announced that it will undertake a study on tied pub tenancies following a debate in parliament yesterday.The study will determine whether tied wet pubs are at an unfair disadvantage compared to other pub tenanted models. After the debate in parliament, the Minister for Business, Energy and Tourism, Fergus Ewing said, “For the last two years the Scottish Government has sought evidence that demonstrates that the ‘tied wet’ sector is much worse off than other forms of contractual arrangements. During this time we have met with representatives from across the industry.”
A tied wet pub is a public house that is contractually required to buy at least some of their beer for a certain pub company or brewery. This is often at a steeper price compared to the market rate. Mr Ewing commented, “This is a complex issue, which needs to be carefully examined to determine whether there is robust evidence to any support change. Evidence provided so far has failed to look at the comparative benefits and any negative impact of the ‘tied’ contract as a package.” Paul Waterson from the Scottish Licensed Trade Association was pleased with the outcome of the meeting, “This is a step in the right direction. The very many reasons why tied pubs are bad for Scotland’s industry and economy are being listened to and so we are encouraged by the decision to analyse the evidence, which is already overwhelmingly strong. One note of caution however is the pace at which we see discussion and change take place. Scotland’s publicans will suffer if England and Wales move forward, whilst we lag behind.”
Ewing also added that for the study to be successful, it will require co-operation from everyone involved in the pub sector from tenants to Pub Co’s. Mr Ewing also added that the research is key before taking any action, “We will then be in a better position 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.”
The Pub Advisory Service (PAS), one of the U.K.’s most prominent voices against the failings of pubcos, has joined a coalition of Scottish brewers and organisations to help the Scottish licensed industry fight against tied pubs. The call for action challenges the British Beer and Pub Association who, along with pubcos, wish to see no change in Scotland. The motion is set to go to parliament tomorrow (Wednesday 20th May) after a motion against tied pubs was lodged by MSP Paul Martin and gained cross-party support. It’s believed that 1000 pubs in Scotland are affected by the ruling which compels tenants of major beer companies to buy beer from their landlords, normally at higher prices than the market rate. It’s reported that tied pubs remove at least £40m from the Scottish economy.
The PAS recently had success at Westminster where MP’s voted to scrap the mechanism. Paul Waterson of the SLTA, one of the members of the coalition, commented, “The principle has already been established by Westminster – the tied model is unhealthy, uncompetitive and needs to be changed. What more needs to be proven? We must not allow delay. Scotland’s industry stands firmly together on this issue and we need decisive action fast.”
Other members of the coalition include Tennent Caledonian Breweries, Williams Brothers, and CAMRA. They were recently joined by Scottish Tourism Alliance who cited concerns of the effect tied pubs have on Scotland’s tourism. Mark Crothall, CEO of the Scottish Tourism Alliance said, “Pubs and licensed premises are an important part of Scotland’s hospitality and tourism offering – but many would now appear to be disadvantaged compared with their counterparts across the rest of the UK.” He concludes, “We encourage the Scottish Government to commit to action on this issue in the near future and we look forward to positive progress being made.”
The House of Lords has confirmed that the issue of tied pubs in Scotland is a devolved matter which will, in future, be handled by the Scottish Government. This development now leaves the road clear for the Scottish Government to create its own legislation around Scottish businesses tied to deals with pubco’s.The move was welcomed by Tennent Caledonian Breweries, Harviestoun Craft Beers, Fyne Ales, the Scottish Licensed Trade Association and others – who all support an end to ‘tied pubs’.
John Gilligan of Tennent Caledonian Breweries, who has already made it clear that TCB welcomed Westminster’s intervention in the situation, said, “We need to protect our Scottish publicans in the same way that Westminster is doing for the licensed trade south of the border – and we’ve got to move forward at pace. If we fail to do so, it could be catastrophic for our home-grown industry,”
He continues, “The assertion from the House of Lords that this issue is a devolved matter is very encouraging. It gives us the reassurance that Scotland has the freedom to ensure our industry is not penalised compared with the rest of the UK.
It’s also excellent to have had confirmation from the Scottish Government that they are open to legislative change and are listening seriously to the argument – an argument that we believe is extremely compelling.”