Plans to remove the pub gaming machine tie could encourage the spread of “criminal behaviour” by “unscrupulous” machine suppliers, Daniel Thwaites has warned.
The Lancashire-based brewer and pub operator has attacked plans to introduce a statutory code in the pubco/tenant relationship in its response to the Government consultation.
One proposal includes abolishing the tie on gaming machines for companies that will have to abide by the statutory code, those with more than 500 pubs. Thwaites said this threshold “leads to a market distortion between these operators and smaller companies”.
The company, which sits below the threshold on 320 pubs, said: “There is a real concern that removing the tie would encourage the spread of criminal behaviour by unscrupulous suppliers of gaming machines and potentially as lack of understanding of the regulations regarding the control and taxation of Category C gaming machines in pubs.”
Thwaites listed the benefits of the machine tie, including ensuring that the pub company sources good quality machines, vets suppliers and monitors suppliers’ performance.
“Some free trade machine supply contracts are onerous either due to the length of term or the fixed rental cost,” The company said. “In free trade, older machines can be supplied on rents which are commercially unreasonable due to the lack of licensee’s specialist knowledge.”
The company said clauses such as the guest beer and free-of-tie options “would have devastating consequences for our business”. Its main concerns are: lower beer volumes in the brewery; a loss of business support and training for free-of-tie customers; and lower levels of on-going investment in its pubs.
Thwaites said it had “serious concern” that the Secretary of State would be able to amend the threshold for inclusion in the statutory code. “We firmly believe that any alteration to the threshold should only ever be carried out through a Parliamentary Bill or equivalent and not on the whim of the Secretary of State.”
The firm warned that the cost of self regulation schemes such as PICA-Service and PIRRS would increase for companies under the 500-pub threshold because larger pubcos will no longer be part of the system.
