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NEWS - Enterprise Inns Say UK Pub Regulation Proposals Flawed

Enterprise Inns Say UK Pub Regulation Proposals Flawed

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Government proposals to ensure British pub tenants are treated fairly by pub owners are based on flawed and misleading evidence and could lead to more pub closures, Enterprise Inns Plc said on Tuesday.

Government proposals to ensure British pub tenants are treated fairly by pub owners are based on flawed and misleading evidence and could lead to more pub closures, Enterprise Inns Plc said on Tuesday.

In April ministers outlined proposals for a statutory code to stop pub companies abusing the "beer tie", under which tenanted pubs are forced to buy their beer from the firms who hold their leases, often at above-market prices.

The proposals come as the trend of pub closures shows no signs of easing and Enterprise, which has 6,000 pubs, argues they could deter future investment and support for the sector.

To ensure fair rent and beer prices, the government wants to introduce an adjudicator who tenants can complain to if they feel they have been mistreated.

The regulatory review is the 43rd covering the industry since 1969 and some analysts say the latest regulation could weigh on the shares of companies which would be affected.

Enterprise, which along with Punch Taverns, Greene King and Marston's, would fall under the code, said a voluntary framework was in place and there was a widely-held industry view that the proposals were based on poor evidence.

The company said what seemed like a high level of complaints to the British Institute of Innkeeping (BII) was a misrepresentation, since most calls were simply asking for advice and only four in four years were categorised by the BII as grievances relating to Enterprise Inns.

Enterprise chief Ted Tuppen said firms such as his had supported pubs at a time when a squeeze on consumer spending had hit trade, adding that free-of-tie pubs were closing at higher rates as a result of constraints on lending to small businesses.

"Everywhere one looks, one sees inconsistencies in their (the government's) argument and ... there are so many issues in this consultation that are just based on false and misrepresented evidence," Tuppen told Reuters.

In the UK, where almost half of the total 50,000 pubs are tied, recent industry data has shown weekly pub closures rose from 18 to 26 in the six months through March.

While the government says its changes would save tenants 100 million pounds ($153.4 million) a year, Enterprise say they would lead to reduced investment, resulting in increased closures and shutting off the industry to new entrants.

Enterprise, which has been heavily focused on reducing debts of 2.7 billion pounds and whose shares are up 45 percent on a year ago, also posted an expected 14 percent fall in first-half pretax profit to 55 million pounds, as bad weather and supply disruption hit trading.


 

 

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