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Morning Briefing for pub, restaurant and food wervice operators

Fri 15th Apr 2016 - BBPA – key aspects of Pubs Code ‘unworkable’, seeks urgent meeting with ministers
BBPA – key aspects of Pubs Code ‘unworkable’, seeks urgent meeting with ministers: The British Beer & Pub Association (BBPA) has said key parts of the new Pubs Code are unworkable and is seeking an urgent meeting with ministers. Chief executive Brigid Simmonds said: “We believe that key aspects of the Pubs Code are unworkable and we are seeking an urgent meeting with ministers to discuss. The public consultation closed on 18 January and with six weeks to go before implementation on 26 May, we are now told that there will be no transition and that tenants who have a rent review due between 26 May and 25 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 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. The 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 (eg £50,000 rent and £100,000 investment) and for a maximum of seven years is unworkable. This puts at huge risk much of the £200m 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.” British Institute of Innkeeping chief executive Mike Clist added: “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.”

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