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GMB Joins Pub Coalition For Fair Deal

Thursday, July 18, 2013

GMB Joins “Fair Deal For Your Local” Campaign For “Free Of Tie” Option For Pub Tenants When Statutory Code Comes To Parliament

MPs should support option 3 which will give tied pub tenants the ability to buy products from the open market and pay a fair market rent for the building says GMB

GMB, the union for tied pub tenants, has become the latest major organisation to formally back the national ‘Fair Deal for Your Local’ campaign calling for a fair deal for Britain’s tied licensees and pubs.

GMB join the existing nine organisations – Guild of Master Victuallers, CAMRA, Federation of Small Businesses, Forum of Private Businesses, Fair Pint Campaign, Licensees Supporting Licensees, Justice for Licensees, and Licensees Unite – calling for an end to the overcharging of pubco tenants, through rents and excessive beer prices by giving them the option of a market rent only option for pub companies with over 500 pubs.

For several years GMB has campaigned to expose the business practices of large pubco's and is a leading voice for reform to ensure tied lessees are charged fair rent and beer prices. They support a market rent only (or genuine free of tie) option which they, like the Fair Deal for Your Local campaign, believe is the only way to stop the overcharging of rents and abuse of the beer tie. See in notes to editors a copy of GMB letter to all 21,000 elected politicians in Britain.

The coalition notably now includes the two major trade unions representing licensees alongside the UK’s two leading small business organisations, as well as CAMRA, Europe’s largest consumer rights’ group, and several publican organised groups.

The Early Day Motion that supports the Fair Deal for Your Local campaign is the most-signed EDM of this session, and the campaign has gained significant momentum since the government consultation on the pubco-tenant relationship closed in mid-June.

Steve Kemp, GMB political officer, said "GMB is delighted to join the 'Fair Deal for Your Local' campaign as the draft statutory code covering tied pub rents comes before Parliament.

GMB want MPs to support option 3 which will give tied pub tenants the ability to buy products from the open market and pay a fair market rent for the building.

GMB worked hard to expose and oppose bad business practice, which not only affects many GMB members and individuals but also families and communities who rely on pubs and the trade itself.

GMB will work alongside the 'Fair Deal for Your Local' campaign to ensure that the right decision is made in Parliament to stop the scandalous way in which pubcos have behaved and that the exploitation ends forthwith."

Commenting, Greg Mulholland, Chair of the All Party Parliamentary Save the Pub Group and Campaign Coordinator of Fair Deal for Your Local, said:

“I am delighted that GMB has signed up to formally support Fair Deal for Your Local and be a campaign partner joining the other nine organisations and the Parliamentary Save the Pub Group to work together to get a fair deal for pubco licensees.

“GMB represent thousands of licensees and know first hand of the need for reform and for a market rent only option, that will stop the pubcos charging exorbitant beer prices and excessive rents. They have been a strong voice for licensees and also in exposing the misleading information, the abuse and the overcharging that sadly has been all too commonplace in the sector.

“The Fair Deal for Your Local campaign is simply calling for hard working licensees to receive a fair share of the profit they themselves earn and it is notable that the campaign has the support of small business organisations and trade unions alike as well as MPs from all parties. That should send a very clear message to the Government as they consider what to introduce in the forthcoming statutory code.”

Commenting, Val Spencer on behalf of Licensees Supporting Licensees said:

“LSL is delighted with GMB joining the Fair Deal for Your Local campaign calling for a fair deal from pubcos for British pubs, publicans and the communities they serve. LSL looks forward to working with GMB as part of the ten-strong campaign group to bring the much needed change to this vital economic sector.

“With this welcome addition, the voices from reform come from all and everyone: business groups, unions, a consumer group, MP's of all parties and, of course, publicans themselves."

End

Contact Steve Kemp 07730 898 102 or GMB Press Office 07921 289880

Notes to Editors

Copy of GMB letter to all 21,000 elected politicians in the UK in May 2013.

I am writing to you as an elected local politician on behalf of GMB tied pub tenants.

The property companies that own over half of Britain’s pubs charge sky high rents to tied tenants of pubs in your area to pay interest on massive financially engineered debts. These debts are held mainly by bondholders in offshore tax havens.

Interest payments on these huge debts have to be paid each week before the tenant pours a pint and regardless of whether s/he can make ends meet or not.

To pay these sky high rents a pint of lager is on average 80p per pint higher and ale is 65p per pint higher than justified by inflation and like for like changes in taxes since 1987. This is pricing pubs out of the market and they have closed in droves.

The common view that shareholders in the pubcos own a pub business is wrong. In fact the shareholders don’t own a pub business; they own a holding company which invests in and manages pub securitizations.

These securitizations are the infernal machine that is closing pubs in your area. It is the same infernal machine that drove Southern Cross care homes in your area to the wall.

In 2009 an Office for Fair Trade report concluded that the average tied lessee is being overcharged by pubcos by around £12,000 per annum or £230 per pub per week, after higher “wet rents” and lower “dry rents” are factored into the equation (pages62 to 64).

GMB and others have campaigned for Parliament to legislate to free pubs from this infernal machine before it destroys them all.

Last month the Department for Business, Innovations and Skills published a draft statutory code for tied pubs for consultation. The consultation is available to view online at https://www.gov.uk/government/consultations/pub-companies-and-tenants-consultation  and will run until 14 June.

GMB welcome the conclusion by BIS that pubcos will overcharge tied tenants for rents unless they are prevented from doing so.

GMB is in favour of Option 3 the “freedom option”. This offers tied tenants the ability to buy products from the open market and pay a fair market rent for the building.

GMB consider that the other two options will allow pubcos to put up rents by the backdoor by overcharging for products tenants are tied to buy from them.

This is what the consultation document says on option 3:

“Option 3: Mandatory free of tie option with open market rent review

All pub owning companies with over 500 pubs would have to offer a free of tie option with open market rent review. This would apply at the next rent review point for current leases and for all new leases. Each licensee would be able to choose to be either tied or free of tie. This is in addition to the statutory code and adjudicator from option 2.

The rent in the free of tie offer would have to be based on Royal Institute of Chartered Surveyors guidance. This would ensure that there was a genuine free of tie option rather than one involving an unrealistically high free of tie rent.”

I am writing to you to ask you to respond to the BIS consultation as follows: by email

pubs.consultation@bis.gsi.gov.uk,  or by post

Pubs Consultation, Consumer and Competition Policy , Department of Business, Innovation and Skills, 3rd Floor, Orchard 2,  1 Victoria Street, Westminster, LONDON ,SW1H 0ET

I would also like you to make representation to your local MP to support the free of tie option 3 when the matter comes before Parliament later this year.

We will likely only get this one chance to save your local pubs. We need local elected politicians of all parties to make their voice heard loud and clear in favour of a free and open market. This will enable the pub tenant to free to buy products at open market prices and a pay fair market rent for pub or stay tied to the pubco if that is better.

If you want more information can you contact steve.kemp@gmb.org.uk  or phone him on 07730 898 102

Yours sincerely Paul Kenny GMB General Secretary

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