The latest report published by the Business Innovation and Skills Committee (BISC) was not the news that pub operators were hoping for. The recommendations published on 20 September 2011 follow an evidence session in June to establish whether progress had been made in implementing previous recommendations going back to March 2010.

The new report is highly critical of the Pubcos and contains some robust language. It concludes that:

• Improvements have been modest and half-hearted, and have only occurred as a result of pressure from the Committee;
• There has been no genuine commitment to reform on issues such as the offer of a free of tie option, and the release of the AWP tie;
• As a principle, a tied tenant should be no worse off than a free of tie tenant when assessing rental valuations, and that there is an unwillingness to apply this principle;
• The BBPA has shown itself impotent in enforcing its own timetable for reform; and
• Industry self-regulation “has failed” and that Pubcos have “wasted” their final chance to address the issues by themselves.

As a result of this, the Committee has recommended to Government that a statutory code of practice should be introduced, with regulation by a statutory Code Adjudicator.

Whilst it appears that what is intended is that the content of the existing BBPA Framework Code should be given the force of law, it should be noted that BISC remain firmly of the view both that the AWP tie should be outlawed, and that Pubcos should be required to offer current and prospective tenants a free-of-tie option on alcohol. Neither of these requirements feature in the BBPA Framework Code.

It remains to be seen how the Government will respond to the report. Nevertheless, in its response to the 2010 Report, the previous Government said that “if the

[BISC] concludes that…the Code is not working as well as it should we will consult on putting the Code on a statutory basis with effective enforcement”.

It is, of course, open for the Government to consider legislation to outlaw the AWP tie. However, any attempt to outlaw the beer tie, at least in respect of vertically integrated estates, would fly in the face of European competition legislation.

The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.