As Nigel Farage has shown, the pub has a particular place in the English imagination. As processes of globalisation and deindustrialisation have changed the fabric and feel of our local communities, the pub has retained its place at the heart of Britain's towns and villages, providing an anchor to the past. IPPR research has shown that pubs remain the most popular place outside our own homes for us to meet other people in our communities.
And yet pubs have been under threat, with the latest data showing that 28 pubs close every week. There are many reasons for these closures, including supermarket price competition, the recession, and changing tastes and lifestyles. But the commercial structure of the industry is an important factor. The pub sector is dominated by large pub companies (pubcos) and very many publicans operate under what is called a 'tied lease' arrangement. This means they have to buy all their beer from the pubco that owns their pub at a list price and cannot buy it wholesale, where it can often be bought cheaper at a discount.
This lack of flexibility has put financial pressure on tied publicans. IPPR research shows that publicans tied to a pubco make less money than those that are not. Nearly half (46 per cent) earn less than £15,000 a year compared to just 22 per cent of independent publicans.
Today's announcement commits the government to important reforms that should shift the balance of power in the pub trade away from the big pubcos and towards the publican. The government has backed a statutory code of conduct and an independent adjudicator to enforce it, as recommended by IPPR. Importantly, publicans will now be given the right to request a 'free of tie' rent assessment that would demonstrate whether or not they are being disadvantaged by the tie.
This move on its own will not arrest the tide of pub closures. However, there are other trends that point to a brighter future for the trade. Forty-three years since the foundation of the Campaign for Real Ale, born at a time when real ale was feared to be dying out, craft beer has never been more popular. More and more microbreweries are opening up and creating a more competitive and distributed market place. This speaks perhaps to a wider desire to connect with an old English tradition and to consume authentically local beer – even if it is Hoxton hipsters doing it as much as the pot-bellied blokes of my dad's generation. If pubs can adapt their offer to capitalise on these trends it may not be last orders just yet.
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