Enterprise Inns and Punch Taverns hit back at damning beer-tie report

Britain’s largest pub companies Enterprise Inns and Punch Taverns have hit back at claims they operate business models leading to the “downright bullying” of tenants.

The claim was made in the long awaited report into the controversial beer tie by the Business and Enterprise Committee.

In the report MPs claimed there was a serious imbalance of power in the relationship between pubcos such as Punch Taverns and Enterprise Inns and their tenants.

“We are not saying that all, or even any, pubcos abuse all lessees all the time, but it is clear that not only is there potential for abuse, but also that abuse occurs,” the report says.

The report calls for the controversial beer tie – exclusive purchasing obligations – to be “severely limited” to allow proper competition in the market. Every lessee, existing and new, should be offered the choice of being free-of-tie or tied, it says.

However Ted Tuppen, chief executive of Enterprise Inns, hit back. “This report is disappointing on many levels. It fails to address some of the major issues that the industry – both pub companies and licensees – currently face.

“Instead the committee has chosen to focus upon a highly emotive, and we believe unsubstantiated, allegation of systematic and widespread abuse by pub companies of their licensees,” said Tuppen.

Tuppen argued Enterprise Inns’ business model was based on a long-term relationship with tenants and a strong common interest in success. He added there were no grounds to refer the issue of the beer tie to the Competition Commission, as recommended by the report’s authors.

Punch Taverns also called on the Government to reject the recommendation for a market investigation by the Competition Commission.

“The competition authorities have looked at this market a number of times,” Punch said in a statement. “We strongly believe that the tied pub model provides a fair and equitable approach to sharing risk between ourselves and our licensees, represents a low cost opportunity for entrepreneurs, and has a rightful place in the market.”

Consumer group the Campaign for Real Ale (Camra) welcomed the report’s findings but argued a referral to the Competition Commission would take too long and be destabilising for publicans.

“Camra has long been concerned about the unbalanced relationship between pub companies and lessees and hopes that the Government will look at this issue with great urgency.

“A mandatory code of conduct providing a set of legally enforceable rights for lessees, particularly relating to rent calculations, would be of huge benefit and should not be delayed until after a lengthy investigation.”

MPs accuse pubcos of 'downright bullying' of tenants >>

Enterprise Inns defends beer tie and attacks Government as profit falls >>

Enterprise Inns and Punch Taverns defend beer tie >>

Licensees want beer-tie plans to be scrapped >>

Up to 30% of beer-tied pubs uneconomic, warns analyst >>

Pub companies to come under scrutiny in new Government inquiry >>

By Chris Druce

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