The Association of Licensed Multiple Retailers (ALMR) will today call for the tie to be reformed to enable pub operators to challenge supply agreements on long-term leases.
In a statement, the trade body has questioned the legality of compulsory supply agreements on long leases and is calling for a separate negotiation that properly reflects open market pricing.
The initiative recommends that new clauses be included on all fully repairing and insuring tied leases, giving people the option to negotiate fairer lease terms.
Under the proposed list of Standard Compulsory Clauses (SCC), lessees would be given two options to consider before the sign-up – one free-of-tie deal with a much higher rent and one that includes a supply agreement.
The ALMR said that it would not join calls for an official investigation into the pub tie as long as all parties signed up to a mandatory code within a year, which would see the SCC enshrined in all applicable leases.
Nick Bish, chief executive of ALMR told M&C Report: “This is an idea. We are trying to move the issue forward. Leaving it to government would be a dangerous mistake.”
The trade body highlighted that it was not challenging the legality of the tie per se nor was opposed to short traditional tenancies that operated through a tie.
The ALMR has proposed that the SCC be drawn up by a working group of all relevant stakeholders under an independent chairman and that it should report back by the end of this summer.
It also added that all trade associations with members that issued or had fully repairing and insuring tied leases should make adhering to the SCC principles a condition of membership.
Bish said: “The ALMR believes that the time has now come to rebalance that relationship and reform the way in which the product tie operates.
“There is a need to ensure a fairer share of the economic benefits for lessees and the division of profits accruing from the individual outlet. That will require both parties to be more open about the income they gain from all income streams within the business, the true operating costs they incur and the long-term investment they make in the outlet.
“This can be achieved - not by means of legislation - but through all sides working together to deliver a more equitable business partnership. We believe this is achievable and a pragmatic solution to the current state of impasse.”
