Pub companies are acting like cartels, and killing trade by forcing landlords to raise prices, the GMB trade union has claimed.
The GMB said “pubcos” – which include big regional names like Punch Taverns, Enterprise Inns and Mitchells & Butlers – made tenants charge up to 80p above the wholesale price of beer, which was forcing many out of business.
The GMB call came as it was revealed that the West Midlands had been the worst area in the country for closures, with 232 pubs owned by pubcos closed down since the start of 2006.
The GMB is calling on the Government to break up the “‘cartels”.
Paul Kenny, the general secretary of the GMB, said: “An unintended consequence of legislation to loosen the tie between breweries and pubs to free up the market for the benefit of consumers has been the growth in pubcos who are operating as a cartel in the industry.
“These pubcos, which own 25,000 pubs, are piled up with billions of pounds-worth of debts.
“They are overcharging pubs by up to 80p a pint to pay the interest charges.
“It is this overcharging which is killing the pubs and driving them out of business. The pubcos are blaming everyone else for the problem and not looking at the damage they have caused through their own greed.
“Britain’s pubs survived two world wars.
“They cannot survive being made to be cash cows to pay off the debts of the property companies and brewers that so clearly don’t have the interests of pubs and consumers at heart.
“We are calling on the Government and MPs to revisit this legislation. The aim should be to break up these cartels to enable pub landlords to buy their beer from breweries and wholesalers at real and competitive prices.”
A parliamentary committee into the links between pubcos and their tenants is being carried out to see if the actions of pubcos break competition rules.
The Business and Enterprise Committee is being chaired by Mid-Worcestershire MP Peter Luff.
Ted Tuppen, the head of Enterprise Inns, has said he expects the matter to be turned over to the Office of Fair Trading which has previously cleared the way the pubcos operate. But some of the members of the committee have already started to break ranks.
Labour MP Lindsay Hoyle, who also sat on the earlier enquiry, has called for beer restrictions placed by pubcos to be outlawed.
In an Early Day Motion, he called on the Government to “outlaw the pub tie and allow landlords greater flexibility in the purchasing of alcohol in addition to reviewing the duty placed on alcohol in order that this reflects alcohol volume rather than flat rate increases in duty”.
Steve Corbett, of the Fair Pint Campaign, welcomed the attitude of Mr Hoyle, adding: “Publicans tied to pubcos are suffering badly from a combination of high rents and outrageous wholesale prices.
“This is causing pubs to close and jobs to be lost at a rate that it is totally unacceptable.
“It was never intended that half of the country’s pubs would end up in the ownership of such a small number of property companies.
“For too long there has been no one standing up for the interests of individual publicans and pub users and the voice of the sector has been dominated by trade associations representing the property companies and the brewers.”
