1st Annual Audit Report

Report on the Pub Company Audit Period 21st July 2016 – 31st July 2017

 

1st ANNUAL AUDIT REPORT

Pub Sector – England & Wales TENANTED Code of Practice (1-499 Tied Pubs)

Pub Sector – England & Wales LEASED Code of Practice (1-499 Tied Pubs)

Pub Sector – Scotland Code of Practice

 

INTRODUCTION

The first annual audit of companies operating tied public houses covered by the above code(s) of practice was carried out over September-October 2017.

This is the first audit to take place since these new codes of practice came into effect for those companies operating 1-499 tied leased or tenanted pubs, and/or tied pubs in Scotland. The audit covers the period 21st July 2016 – 31st July 2017. A full list of those companies covered by each code can be found in Annex A.

The new codes replaced the Industry Framework Code of Practice version 6, due to the introduction of the Pubs Code Regulations 2016 which established a statutory code of practice for companies operating 500 or more tied pubs.

Under the Industry Framework Code of Practice (IFC), three annual audits had been carried out of those companies covered by the IFC that operated over 100 leases. These companies are now covered by the Statutory system and are therefore no longer applicable for this audit. Therefore, this audit is not comparable with the previous IFC audits, as the companies covered are different.

Those companies not covered by the Code (i.e. those operating under 500 tied pubs) and the Pub Governing Body agreed that the good practice enshrined in the Industry Framework Code should continue, and therefore developed the three new Codes based on the IFC, with additional improvements and elements being brought up to date. In Scotland, which is not covered by the Statutory Code, the majority of companies operating tied pubs have signed up to the bespoke Scottish Code (which was created for the first time specifically for the Scottish tied pub sector).

This report has been prepared by the Pub Governing Body, and summarises the data received from the audit, which will be carried out on an annual basis going forward.

 

COMMENTS FROM THE BOARD

The year covered by this audit saw the transition from a full self-regulatory system for tied pubs, to a mixed voluntary and statutory system overseen by different bodies.

Following this first audit of the new self-regulatory codes, and taking into account that this is a new set of companies being audited against the codes for the first time, the Board is pleased to see a high level of compliance, as evidenced by the data below.

Of particular note was the high level of compliance regarding business plans, and the number of rent reviews settled within the audit period. On BDM training, it was noted that there was an issue with the availability of BDM trainers and training courses, with some companies finding it difficult to access training. This is an area where the PGB, led by the BII, is taking action by setting up a working group of companies, trade bodies and tenants to address this issue.  

Sir Peter Luff, Chairman of the Pub Governing Body, said:

“The results of this annual report underlines the crucial role the Pub Governing Body continues to play following the implementation of the statutory Pubs Code.

“We are pleased to see strong levels of compliance from the companies governed by these Codes and will continue to monitor and review the codes themselves to ensure they remain relevant to both companies and tenants. Where issues have been raised, such as access to BDM training, the Board is taking action to address this in time for the 2017/18 audit taking place later this year. “The Board has also worked with other stakeholders to ensure PIRRS is available for those tenants covered by the statutory Code, in addition to those governed by self-regulation.”

 

HEADLINE STATISTICS – ENGLAND & WALES

The full list of companies covered by the respective codes can be found in Annex A.

Pubs surveyed

  • 2,928 tied pubs covered by the codes of practice for under 500 companies (England & Wales).
  • Of these, 2,513 are classified as tenancies and 415 as leases.

Code compliance

  • 447 final interviews took place for leases and tenancies in the survey period.
  • 446 business plans were completed (99.8%) with one outstanding due to a procedural error  (lost document).
  • PEAT was completed in 285 cases (64%). The remainder were waived (35%) as applicants were multiple retailers with a number of other pubs, had three years previous tenanted/leased experience or already had an existing successful tied pub with the company concerned.

 

Rent reviews

    • In the survey period, there were 499 rent reviews triggered.
    • Of these, 488 (98%) were negotiated and settled within the same period.
    • 11 (2%) were still under negotiation.

 

Business Development Managers

      • 93 BDMs were employed by companies over the survey period.
      • 58 of these (62%) were BIIAB Level 4 trained.
      • The remainder (35, 38%) were either in training, only just joined the company (the Code allows for training within 24 months of being appointed), or waiting for courses to become available.

 

PIRRS and PICA-Service

      • There were no referrals to PICA-Service in the survey period.
      • There was one referral to PIRRS in the survey period.

 

‘Protected’ agreements

      • Of the total pubs audited, 2,477 (85%) are Landlord & Tenant Act ‘protected’. The remainder (15%) are ‘unprotected’ agreements.

 

HEADLINE STATISTICS – SCOTLAND

The full list of companies covered by the respective codes can be found in Annex A.

Pubs surveyed

      • 486 tied pubs are covered by the codes of practice in Scotland
      • Of these, 310 are classified as tenancies and 176 as leases.

Code compliance

      • 89 final interviews took place for leases and tenancies in the survey period.
      • 89 business plans were completed (100%).
      • PEAT was completed in 78 cases (88%). The remainder were waived (12%) as applicants were multiple retailers with a number of other pubs, had three years previous tenanted/leased experience or already had an existing successful tied pub with the company concerned.

Rent reviews

      • In the survey period, there were 39 rent reviews triggered.
      • Of these, 38 (97%) were negotiated and settled in the same period.
      • One rent review was still under negotiation.

 

Business Development Managers

      • 18 BDMs were employed by companies over the survey period.
      • 13 of these (72%) were BIIAB Level 4 trained.
      • The remainder (5, 28%) were either in training, only just joined the company (the Code allows for training within 24 months of being appointed), or waiting for courses to become available.

 

PIRRS and PICA-Service

      • There were no referrals to PICA-Service in the survey period.
      • There were no referrals to PIRRS in the survey period.

 

‘Protected’ agreements

      • Not applicable, no Landlord & Tenant Act in Scotland.

 

 

PGB

March 2018

 

ANNEX A – SIGNATORIES TO THE CODES

England & Wales

Adnams plc

Arkell’s Brewery Limited

Camerons Brewery Limited

Charles Wells Limited

Daniel Batham & Son Limited

Daniel Thwaites plc

Everards Brewery Limited

Frederic Robinson Limited

Fuller Smith & Turner plc

George Bateman & Son Limited

Gray & Sons Limited

Hall & Woodhouse Limited

Harvey & Son (Lewes) Limited

Hawthorn Leisure Limited

Heavitree Brewery plc

Hook Norton Brewery Company, Limited

Hyde’s Brewery Limited

J.C. & R.H. Palmer Limited

J.W. Lees & Co. (Brewers) Limited

Joseph Holt Limited

Liberation Group Ltd/Butcombe Brewery

McMullen & Sons Limited

Mitchells & Butlers plc

NewRiver Retail Limited

St Austell Brewery Company Limited

S.A. Brain & Company, Limited

Shepherd Neame Limited

Timothy Taylor & Co. Limited

Trust Inns Limited

WH Brakspear & Sons Limited

Wadworth and Company Limited

Young and Co’s Brewery plc

 

Scotland

Admiral Taverns Limited

Belhaven/Greene King plc

Hawthorn Leisure Limited

Punch plc

Star Pubs & Bars/HEINEKEN UK Limited

Trust Inns Limited

 

 

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