Leading figures in the pub sector have expressed “grave concerns” about the timetable for implementation of the pubs code.
Punch’s Duncan Garrood and Kevin Georgel of Admiral Taverns have both demanded answers from the Government about how a smooth transition can be achieved with just 41 days until the legislation is enacted.
Meanwhile the British Beer & Pub Association has said “key aspects of the code are unworkable”.
The Government released its response to the two-part pubs code consultation last night. A summary of the changes to the draft code can be found here.
Today, Admiral Taverns chief executive Kevin Georgel told MCA: “Whilst Admiral Taverns will embrace the code we have grave concerns about the timeframes outlined for the transitional period which, in my view, fundamentally compromises a smooth implementation of the new legislation across the industry.
“Our own focus in the coming weeks as we work through the detail will be on ensuring that the people across our business and our own licensees have the appropriate support and training they need to understand the code and its implications and ensure compliance across our estate.”
Punch chief executive Duncan Garrood said: ““Whilst we welcome the fact that the pubs code has finally been released, providing some certainty to this imminent legislation, we are very concerned at the lack of any form of transitionary measures given this legislation comes into force in only forty-one days. It is the Government’s duty to ensure the smooth implementation of legislation so we seek an immediate explanation on how they expect this to happen.”
A spokesman for Enterprise Inns said: ”Whilst we have been preparing as much as possible for the implementation of the legislation the latest documents published by the Government contain a number of new elements and very many other changes which we must now fully digest. We will provide briefings to those members of our staff that are affected by the Code as soon as we are in a position to do so.”
British Beer & Pub Association chief executive, Brigid Simmonds, said: “We believe that key aspects of the Pubs Code are unworkable and are seeking an urgent meeting with Ministers to discuss.
“The public consultation closed on the 18th January and with six weeks to go before implementation on 26th May, we are now told that there will be no transition and that tenants who have a rent review due between 26th May and 25th November will have to be offered a Market Rent Only agreement. This is despite the fact that the existing Industry Framework Code requires lease rent reviews to commence at least six months before they are due. Some 40% of the 800 plus reviews due over the next six months have already been completed.
“When the Groceries Code was introduced there was a six month’s transition between adoption and the need to act on it, and the same should apply to the pubs legislation.
“Quite apart from the disruption to agreements already concluded, with no final details available, there is no time for staff training of those who will have to ensure compliance with the new legislation. Some 1,000 colleagues in the industry need to understand the details of the Code and this will take time.
“This point also applies to tenants, as they will need to be briefed, trained and advised on the new legislation. The adjudicator will also need to produce guidance, advising publicans of their rights under the new code. None of these important actions can reasonably be expected to take place smoothly, without a sensible transition period.
“BBPA also has some real concerns about other details of the Secondary Legislation, but the proposal that the waiver for investment can only be entered into where the investment is at least 200% of dry rent (e.g. £50k rent and £100k investment) and for a maximum of seven years is unworkable. This puts at huge risk much of the £200 million capital invested each year by pub companies in their tied pubs and will ultimately lead to further closures.
“In one company, 80% of their pub investments last year were under 200% of dry rent and, for example, a recent £400,000 investment in an ailing community pub in Newcastle will never happen again as it would not pay back within seven years.
“Finally, for very small entrepreneurs wanting to own their first pub, it is very disappointing that the Government is looking to impose the statutory code elements of the legislation, such as the extensive compliance and information requirements, on them if they buy a pub from one of the large companies. The cost of compliance will be considerable.”
Association of Licensed Multiple Retailers chief executive Kate Nicholls said: “The uncertainty surrounding the details of the code has had a major impact on investment and planning across the sector. Businesses need stability and certainty in order to function effectively and this lack of security and concern over the particulars of the code has not made life easier for licensees. The publication of the code finally brings a much needed sense of clarity that should give licensees the stability they need to move forward.
“The ALMR’s primary focus now will be ensuring that operators understand the new requirements, know what to expect from their pub company and are aware of what is expected of them. We will be working to provide guidance to ensure that licensees are equipped to enter into commercial agreements and that problems are avoided before they have a chance to develop. We will be working closely with the BII to develop a detailed Q&A about the code and providing seminars for lessees to help them understand their obligations and plan accordingly.
“As a sector we need to work collectively on establishing and promoting appropriate entry training for lessees and facilitate access to existing methods of dispute resolution that are open to businesses. This needs to be done rapidly to ensure that lessees can hit the ground running on 26 May.”
Mike Clist, chief executive of the British Institute of Innkeping, said: “We are pleased that the Government have released the final version of the long awaited pubs code and that there will finally be some clarity for our members and other licensees across the country. We appreciate that the time between now and its implementation is short and there is great concern about the lack of transitionary measures.
“We wish to reassure all of our members who are concerned about how the code will affect them that we will be working with other trade bodies to provide them with the support they may need details of which will be announced shortly. We already operate advice helplines and expect they will prove particularly valuable to our members over the coming months.”
