I am afraid that the hon. Gentleman is simply wrong. I can send him the e-mails I have received from microbreweries—cider as well as beer producers. They are desperate to get more direct access, so that they can knock on the door of the pub 2 miles down the road and say, “We believe our beer is great and that your customers would like to drink it. We would like to sell it to you at our brewery price, rather than you having to go through the SIBA-directed delivery scheme, which has a considerable mark-up, or get on a
pubco list,” as the pubco outrageously demands an incredibly low price that many microbrewers simply cannot afford to brew at, and then marks up prices by 60% to 70% to sell the product to their own so-called business partners. Is that seriously a model that Conservative MPs can support? I remain baffled by that.
Let me remind you, Mr Deputy Speaker, of the reality of the pub company model. As I look round, I see hon. Members who have family and smaller brewers in their constituency and want to support them; I respect their position, and I am at one with them on that, which is why the Fair Deal for Your Local campaign has always said that the provision should apply only to companies with over 500 pubs.
Let us look at the reality of what the big pubcos have done to skew the traditional tied tenancy model. Punch Taverns, a pub company that does not brew a single pint of beer, made a profit over 10 years—these are its figures from its own annual report—of £2.271 billion, all from on-selling beer to its own so-called business partners. Frankly, in any other country, that would be called a protection racket. It is extraordinary and unjustified, which is why it is right for us to try to deal with it.
If Members do not believe that this is an anti-competitive model—I know that some colleagues behind me do not, for their own reasons—they should listen to former Punch licensee Alison Smith, a Conservative activist who has e-mailed all colleagues today to tell of the reality of the pubco business model, and how it stifled her and her partner, preventing them from being able to create a successful pub. Even though they were doing well and improving their business, the draconian terms of the pubco lease meant that that was simply not possible.
What do hon. Members think these large pub companies are? They are not pub companies at all; unlike the traditional brewers, these are people who do not really care about our pubs or our brewers. There was a huge rush in the City when people saw this “get rich quick” scam, a way to inflate the value of companies artificially by basing it on what they could overcharge their own tenants by—their tenants for 25 years on these outrageous, new, long-term, fully repairing and insuring leases.
Let me give the example of what happened to the excellent Sir John Barleycorn in Hitchin. The community, I am delighted to say, applied to use powers introduced by this coalition Government to apply for community value status; they applied for the pub to be an asset of community value. There were objections. The most vociferous one said:
“the current use of the premises as a public house…does not itself further the social wellbeing or social interests of the local community and therefore is not land of community value.”
Who said that? Was it someone living down the street who was anti-pub? No, that objection was from the so-called pub company Punch Taverns, which was seeking to get rid of this pub and sell it off after forcing out the licensees. That is what is going on.
If there is any doubt that this model is closing pubs, let me read out the stark evidence of the figures. These figures, collated by CGA Strategy for the British Beer & Pub Association and CAMRA, showed that there was a much greater drop in the number of leased and tenanted pubs than in the number of free houses between December 2005 and March 2013. The number of non-managed—that
is, tenanted and leased, mostly tied—pubs fell by 5,117, whereas there was a fall of only 2,131 free-trade pubs. All pubs have issues—there has been a difficult recession—but the difference is clear and stark.
We could also look at the pubco trade association’s own figures—figures that it has frankly been keeping very quiet about. Its own figures show that over 10 years, the number of non-managed—in other words, tied, tenanted and leased—pubs decreased by 8,000, while the free-trade sector expanded by 1,600 pubs. I repeat: that is its own figures. Between 2008 and 2012—just four years—the two giant pubcos, Enterprise Inns and Punch Taverns, collectively disposed of over 5,000 pubs—a third of all their pubs in just four years. Can any Member seriously stand up and say that this is a business model that is working for pubs?