Punch Taverns PLC Regulatory Update (4248X)
November 19 2014 - 4:00AM
UK Regulatory
TIDMPUB
RNS Number : 4248X
Punch Taverns PLC
19 November 2014
PUNCH TAVERNS PLC
("Punch")
Regulatory Update
The House of Commons yesterday voted in favour of a last minute
amendment to the Small Business, Enterprise and Employment Bill
2014-15 (the "Bill") to introduce a market rent only option for
tenants of pub companies with 500 or more pubs, effectively
breaking the beer-tie.
Punch notes that the amendment to the Bill is contrary to the
Government's proposals for statutory regulation of the pub sector,
which were published on 3 June 2014 following extensive public
consultation on earlier BIS proposals and economic analysis
provided by Government appointed independent external consultants.
The Government's proposals did not include a mandatory free-of-tie
option for tenants on the basis that it would have been likely to
cause a high degree of uncertainty in the industry and would have
unnecessarily risked leading to higher levels of pub closures and
job losses.
Punch has been at the forefront of improving the support for pub
tenants across the sector and we remain committed to a sustainable
future for British pubs. However, the amended Bill (should it
proceed through Parliament in its current form to become law) would
have significant adverse consequences for Britain's community pubs.
The Government's own research indicated that breaking the tie would
be expected to result in between 700 and 1,400 more pubs closing
with 3,700 to 7,000 job losses. Furthermore, we believe that the
amendment would be likely to have the effect of reducing pub
investment, reducing consumer choice and exposing tenants to higher
fixed rents, reduced levels of support and greater risk of
failure.
Punch's view is that the amendment would lead to the creation of
an unworkable two tier economic market and would be contrary to
existing legal contracts and property rights. It also runs contrary
to the OFT's view when it considered a super-complaint from CAMRA
in 2010 and concluded that tied tenants were able to compete
effectively and that the commercial interests of pub companies and
their tenants were aligned.
We are currently considering the potential impact of the amended
Bill on Punch, including the implications for our substantial pub
investment program and our disposal plans.
19 November 2014
Enquiries:
Punch Taverns plc Tel: 01283 501 948
Stephen Billingham, Executive
Chairman
Steve Dando, Finance Director
Brunswick Tel: 020 7404 5959
Jonathan Glass, Mike Smith
Forward-looking statements
This announcement contains certain statements about the future
outlook for Punch. Although Punch believes that the expectations
reflected in these statements are based on reasonable assumptions,
no assurance can be given that such expectations will prove to have
been correct.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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