After 10 pubs closed in South Hampshire in 2011, John Denham is calling for Government action to slow the tide of pub closures by supporting a resolution to be debated on Thursday 12 January.
The resolution calls on the Government to introduce a statutory code of practice and adjudicator for the industry. Mr Denham’s call for action comes following his support for a proper code of practice for pub companies whilst he was Secretary of State for Communities and Local Government. Mr Denham made it clear that if the previous voluntary code of conduct failed, a Labour Government would back legislation to ease pressure on pub tenants and managers across the UK.
Studies suggest that 25 pubs are closing every week nationwide, with 29 closing in South Hampshire in the last three years. In Southampton, the closure of pubs has a clear impact on the identity of communities, particularly outside of the city centre. In September 2011, the Business, Innovation and Skills Select Committee stated that they saw “no other alternative” than legislative intervention to halt pub closures and tackle issues such as the Beer Tie and Restricted Covenants. However, in November, Ed Davey, Minister for Consumer Affairs, stated that there would be no such legislative action.
Problems for Southampton pubs that a Legislative Code of Practice could address:
1) The ‘Beer Tie’
The Beer Tie or Pub Tie lets large pub companies force tenants to purchase all of their beer from the pub company itself. The pub company has control over the pricing which denies pubs the ability to competitively source their stock. 88% of tied publicans who claim to be financially struggling identify the beer tie as one of the most significant factors in their financial problems.
2) The Restricted Covenant
The Restrictive Covenant is an agreement often made by pub companies when selling pubs in areas in which the pub company owns pubs elsewhere. It denies the new owner and subsequent owners the right to re-open the pub, meaning that whilst the pub companies receive more business, community pubs are lost, never to be reopened.
A list of pub closures in Mr Denham’s Southampton constituency are as follows:
- Winning Post, Peartree
- Merry Oak, near Peartree
- Eagle, City Centre
- Percy Arms, Bitterne
- Bulls Eye, Sholing
- Ark, Bitterne Park
- Exford Arms, Harefield
John Denham, Labour MP for Southampton Itchen, said:
“The pub is such an important feature of Southampton’s community and it is very concerning to see the number of community pubs in Southampton declining at an alarming rate. In my constituency, pubs such as the Merry Oak, Eagle and Winning Post have been closed and empty for some time, and we know this same story is being played out in other parts of the country too.
“There are some practices by large pub companies which are undoubtedly fuelling this decline that a legislative code of practice could address. For example, an IPPR report shows that beer-tied pubs are 16% more likely to be in financial trouble than free-of-tie pubs, and that 88% of pub owners in financial difficulty identify the beer tie as a major cause.
“I stand by the commitment I made as Secretary of State for Communities and Local Government to support legislation to tackle this crisis in the pub sector if the voluntary approach did not work. The report from the BIS Select Committee clearly shows that the voluntary approach has failed and I am appalled that the Liberal Democrat and Conservative Ministers are refusing to act on this urgent issue.”