Leading analyst Douglas Jack has questioned the stance taken by the ALMR over its wish for a statutory code of practice offering a free of tie option and open market rent review governed by an independent ombudsman. As reported by M&C Report yesterday, Punch Taverns MD, Roger Whiteside told an All-Party Parliamentary Save the Pub Group meeting that offering a genuine free-of-tie option would put the pubco business model in "serious jeopardy". He said: “A genuine free-of-tie option “would fundamentally undermine the nature in which we are able to galvanise our scale advantage in buying from brewers. It would put the business model into serious jeopardy if that were to happen overnight”. Jack said that despite this, a statutory code of practice offering a free of tie option and open market rent review governed by an independent ombudsman is wanted by the IPC, which includes Fair Pint and the ALMR, who complained that "there is little evidence of free-of-tie options being offered”. Jack said: “The ALMR’s stance appears strange. Would it recommend to its managed pubco clients that they should give up their beer purchasing terms and tell each individual bar manager to buy beer independently? Unlikely, yet that is what they want to impose on the tenanted pub sector. Why did they not suggest a free-of-tie pricing option and open market rent review, which would at least preserve pub profitability?” “We believe free-of-tie pricing options with open market rent reviews have started to become available on new lettings/rent reviews. A move to full free-of-tie options would remove the controlled central purchasing element (which finances tenant support), undermine pub/pubco profitability and lead to an acceleration in pub closures. The sensible solution would be to maintain the current code of practice system, but this cannot be guaranteed.” Jack also questioned whether MPs were desperate to interfere with the pub company model. He said: “We believe just three MPs (other than Greg Mulholland) turned up to “Save the Pub” meeting. This may reflect: the last independent tenant survey not backing up the negative stance of the anti-tie lobby; all previous investigations unanimously supporting the tie; the closure rate in the tied tenanted market being lower than the free trade or the retail sector (due to the tie sharing the operational gearing and providing a tenant support mechanism).” Jack concluded that the start of the BISC meetings at the end of the month is likely to “limit upside to share prices, but our stance on Punch Taverns remains Buy, underpinned by our valuation of Spirit (at 85p/share)”.