GMB Pubco Tied Pub Tenants Ballot For Industrial Action

1 Jan 2010

There are 25,000 tied tenants (lessees) of seven large property companies called pubcos. These are Admiral Taverns Ltd, Enterprise Inns, Fuller Smith & Turner, Greene King, Marston’s, Punch Pub Company, and S & N Pub Enterprises. Lessees are charged up to double the wholesale prices available on the open market. In May 2009 The House of Commons Business and Enterprise Committee (BEC) found that two thirds of them earn less than £15,000 per annum for up to 60 hours per week.

From an OFT report in October 2009 it is clear that the average tied lessee is being overcharged by pubcos by around £12,000 per annum, after higher “wet rents” and lower “dry rents” are factored into the equation. The OFT said that lessees being overcharged by pubcos is something that is outside the remit of the competition authorities to remedy. OFT also said that the contractual issues that gives rise to this overcharging are matters to be dealt with in negotiations between pubcos and lessees. The BEC report had earlier highlighted the total inequality of bargaining power between pubcos and lessees.

Tied pub tenants, through the Fair Pint campaign and the Pub Revolution movement, came to the conclusion during 2009 that the only answer was to combine into GMB to take direct action to secure negotiations with pubcos. The aim to achieve very substantial cuts in wholesale prices and a resolution to a wide range of grievances experienced by the tied tenants at the hands of the pubcos middle managers and their agents like Brulines.

A spokesperson for Pub Revolution said “Parliament has given tied tenants legal immunity in trades disputes when we are members of an independent and registered trades union. There is no doubt in our minds that pub tenants need to use this immunity to free themselves of the yoke of the pubcos and GMB agrees with this. There is no other remedy since the OFT washed it hands of the dispute. We are delighted that thousands of tied tenants agree.”

Paul Maloney, GMB National Officer for tied tenants said” In furtherance of the trade dispute in tied pubs GMB will organise a nationwide official ballot in the New Year to seek a mandate for official industrial action by tied tenant members in the industry. If members vote for action pubs will lower prices to customers during the dispute. The aim of the action by the tied tenants is to secure negotiation with pubcos to achieve very substantial cuts in wholesale prices and a resolution to a wide range of grievances experienced by the tied tenants at the hands of the pubcos middle managers and their agents like Brulines. GMB consider if the £12,000 figure for overcharging per year is accepted as correct – which members think is an underestimate – then to remedy this, for 25,000 tied pubs, would cost £300m per annum. In 2008 the top 5 pubcos made profits before interest and tax of £1,456m so they can well afford to charge lower wholesale prices to stop the overcharging.”