Monthly Archives: May 2018

Pubs Code and Adjudicator

 

Pubs Code and Adjudicator

Updated 3 March 2017

Note:- This legislation was brought in as a result of the activities of a number of Pub Co’s and the failure rate of Tied Tenants, and other issues, it is well worth reading and fully understanding, if you are considering taking a Tied Lease/Tenancy or already have one.

The Small Business, Enterprise and Employment Act 2015 introduces:

Contents

  1. About the code
  2. About the adjudicator
  3. Consultations
  • a statutory Pubs Code to regulate the relationship between tied pub tenants and the large pub-owning businesses which rent the pubs to them and sell them tied products
  • a new independent Pubs Code adjudicator to enforce the code

About the code

The code came into force on 21 July 2016 and applies to all businesses owning 500 or more tied pubs in England and Wales. It governs their relationships with tied pubs but not with their managed houses or free-of-tie pub tenants. The 2 principles of the code are:

  • fair and lawful dealing by pub-owning businesses in relation to their tied tenants
  • tied pub tenants should be no worse off than if they were not subject to any tie

The code makes sure that tied pub tenants:

  • receive the information they need to make informed decisions about taking on a pub or new terms and conditions
  • have their rent reassessed if they haven’t had a review for 5 years
  • can request a market rent only option to go free of tie and pay only a market rent in specific circumstances, including at a rent review or renewal of tenancy

The Department issued a note of clarification on 3 March 2017, in light of questions raised by stakeholders as to the legality of a provision of the Code and the terms of the Small Business, Enterprise and Employment Act 2015. This note sets out the Department’s clear view that a market rent only compliant tenancy can include a stocking requirement.

About the adjudicator

The Secretary of State for Business has appointed Paul Newby as the adjudicator.

The adjudicator will be funded through a levy on the pub-owning businesses covered by the code.

The adjudicator has powers to:

  • resolve individual disputes
  • award redress to a tied tenant if a breach of the code is found
  • investigate widespread abuses of the code

The forms of enforcement available to the adjudicator after an investigation are to:

  • make recommendations
  • require information to be published
  • impose a financial penalty

The adjudicator is able to:

  • give advice on any matter relating to the Pubs Code to tenants, pub-owning businesses and interested parties
  • arbitrate disputes referred to him by tenants for alleged breaches of the Pubs Code
  • arbitrate disputes relating to the market rent only process referred to him under the code by either tenants or pub-owning businesses

The adjudicator will have to publish guidance on investigations by 2 November 2016 by the latest and will then have the power to start investigations into breaches of the code.

Before the guidance is published the adjudicator has to consult on the:

  • criteria for deciding whether to carry out investigations
  • practices and procedures he intends to adopt for investigations
  • criteria for choosing to use the various enforcement powers and for deciding the amount of any financial penalty

The adjudicator may also consult on and publish other guidance on any other matter relating to the application of the code or compliance with it.

Under the Enterprise Act 2016 the adjudicator will be required to report to the Secretary of State on any unfair practices by pub-owning businesses aimed at avoiding the pubs provisions of the SBEE Act or the Pubs Code.

Consultations

We consulted on the contents of the code and other regulations. This consultation has 2 parts:

We received 80 responses to the consultation. These mainly came from:

  • pub companies and breweries with 500 or more pubs
  • interest groups, trade bodies and other organisations
  • tied tenants

The government response to this consultation was published on 14 April 2016.

When we previously consulted on this issue, in 2013, we received more than:

  • 1,100 responses from all parts of the industry
  • 7,000 responses to an online survey run in parallel

The government response to this consultation was published in 2014, ahead of the introduction of the act to Parliament.

The government has also introduced measures to help protect pubs of community value and taken a number of tax reduction and other measures to support the pubs industry.

 

JG&P, Latest Licensing and Gambling Information.

 

BBPA Guidance for Russia 2018

The BBPA has produced guidance for pubs in anticipation of the imminent World Cup.

Suggested advice within the Guidance for pubs contacting the police and licensing officers to let them know plans for showing FIFA World Cup events, as well as making public transport information readily available to assist customers in leaving venues safely.

The Guidance, if of interest, can be found: ‘Managing World Cup Success Advice for licensees showing World Cup 2018 football matches’.

New PRS live performance licence gets Copyright Tribunal approval

PRS For Music is reported to have received Copyright Tribunal approval of new terms for one of its main live performance licences, what the rights body calls its ‘Tariff LP’ licence. Concert promoters need public performance licences from whoever owns the copyright in any songs performed at the shows they promote.

Terms of the agreed new tariff  submitted to and approved by the Copyright Tribunal will become effective from Monday 11 June 2018.

The key amendments to the tariff include:

  • The royalty rate for concerts and all other live music events within the scope of Tariff LP, will increase from 3% to 4% [or 4.2%*], except for festivals that meet certain criteria, as below.
  • There will be a new royalty rate within the tariff for festivals that meet certain criteria which recognises specific considerations for festivals. For these qualifying festivals the royalty rate will reduce from 3% to 2.5% [or 2.7%*].
  • The minimum fee charged for events will be waived entirely, providing that music reporting requirements are met.
  • The incorporation of a direct licensing mechanism, as agreed with the live sector.

*The higher charge in both instances (4.2% and 2.7% respectively) would apply where the licensee elects not to account to PRS in respect of revenue generated from booking fees, administration and service charges.

Source: https://www.prsformusic.com/press/2018/industry-reaches-agreement-on-new-live-music-licensing-terms

Gambling – Government’s Response to the consultation on proposals for changes to Gaming Machines and Social Responsibility Measures.

As has been widely reported this morning the Government has published their response to their October 2017 consultation  on gaming machines and social responsibility measures.

The headline proposal, which will need further legislation for implementation, is the reduction of the maximum stake on B2 gaming  machines (commonly known as FOBT’S) from £100 to £2 with stakes and prizes being frozen across many other forms of gaming despite industry representations calling for rises in several categorises and for a rise in the automatic entitlement afforded under an Licensed Premises Notification. (Pub type gaming machines).

It is being stated that the reduction in B2 stakes will have an annual cost to business of £540 million, estimate the Government.  Industry has warned that this decision may lead to large scale redundancies, a significant reduction in tax yield to the government from this sector is also expected.

The Government’s stated aim of this policy is reducing harm for those most vulnerable by reducing the ability to suffer high session losses, while also targeting the greatest proportion of problem gamblers, and mitigating risk for the most vulnerable players for whom even moderate losses might be harmful.

Some members of the industry have warned that this issue may simply manifest in another form of gambling and that, as an industry, the issue of problem gamblers must still be addressed.

As well as gaming machines the consultation also looked at a range of other issues including:

  • Online Gambling and
  • Advertising

The key findings in relation to online gambling were stated as follows:

  • We were clear at consultation stage that more needed to be done to protect consumers who gamble online.
  • All online gambling is account-based and therefore operators know who their customers are and their patterns of play. We expect operators to act now and trial a range of measures to strengthen the existing protections in place.
  • If operators fail to demonstrate sufficient progress then the Government and the Commission has powers to introduce additional controls or restrictions on the online sector.
  • The Minister for Sport and Civil Society will co-chair a roundtable with Margot James, Minister for Digital and the Creative Industries, to bring together stakeholders from the gambling and technology sectors and move towards a wider roll-out of best practice in using technology to improve player protections.
  • The Gambling Commission has now set out a clear plan of action to strengthen player protections online: specifically around age verification, improving terms and conditions, identifying risks to players earlier and on customer interaction policies.

A link to the full response can be found here and the government’s impact assessment can be found here.

John Bensalhia investigates the rise in the popularity of the coffee shop. (Speciality Food)

The rise of the coffee shop: here’s what you need to know

Rise in the popularity of the coffee shop.

By John Bensalhia

Throughout history, the coffee shop has grown in stature. From the first coffee house in Damascus in 1530, coffee’s first appearances outside of the Ottoman Empire led to the burgeoning growth in Europe in the 17th century. By the mid-1600s, coffee houses had debuted in locations such as Venice and in Oxford, England.
Today, the coffee shop’s popularity has risen for both major branded chains and independents. Allegra World Coffee Portal’s Project Cafe 2017 UK report estimates that there are some 22,845 outlets in the country today.

Statistics from Mintel Research found a notable boost for the coffee shop market, which had recently enjoyed its largest period of growth since 2008. The last five years have seen a particular renaissance for the market, with a rise of 37% from 2011 (£2.4 billion) to 2016 (£3.4 billion). In particular, the 12 months between 2015 and 2016 saw the largest year-on-year boost, with an impressive 10.4% growth.

Trish Caddy, foodservice analyst at Mintel, attributes much of the recent growth to habitual coffee drinkers and the continually increasing number of coffee retailers ubiquitous on British high streets. “A raft of non-specialist venues that feature barista-style coffee on their menus with takeaway functions are grabbing a slice of the coffee shop market.”

Mintel’s food and drink analyst, Anita Winther, adds that according to its Coffee Shops UK 2016 Report, 65% of adults are reported to have bought a hot drink from a coffee shop in the three months to October 2016. “Meanwhile, of Brits who have visited a specialist coffee shop, 29% visit once a week or more to sit in and 25% for a takeaway.”

The bigger picture
Youngsters are helping to propel the status of coffee shops, as Anita explains: “16-34-year-olds are the core users of coffee shops: an age group who lag behind older cohorts when it comes to at-home coffee. While this means that coffee shops are snatching sales from retail, young people’s usage of coffee shops is likely to help build their appetite for coffee as a whole, which should also benefit retail coffee sales in the long term.”

Allegra World Coffee Portal’s Project Cafe 2017 UK report has also reported growth in the coffee shop market, with 2016 witnessing a 6% growth in outlets and a 12% growth in turnover. While part of this is attributed to leading chains like Costa, Starbucks and Caffe Nero reporting positive like-for-like sales growth, another factor has been the gaining momentum of small and medium boutique chains such as Joe And The Juice, Taylor St Baristas and Coffee #1.

Simply Business research, meanwhile, has also reported a massive increase in independent coffee shops for the year between 2015 and 2016. The 41% growth spotlighted specific areas of the UK which had enjoyed notable rises. The area to see the biggest rise was Nottingham (69% increase year-on-year), followed by Birmingham (53%), Sheffield (48%) and Coventry (37%).

The growth in coffee shops is part of the bigger picture. A recent report from the NPD Group found that Britain was the third highest country for coffee consumption. With 2.098 billion cups of coffee consumed away from home (in the year leading up to December 2015), Britons were only behind France (2.27 billion) and Italy (4.78 billion).

A key reason for this statistic is that Britons have a whole range of speciality coffees to choose from. Options such as Cappuccino, Latte, Americano and Mocha continue to surge in popularity. The NPD Group report found that the most popular of these in 2015 was the Cappuccino (an increase of 12% since 2012 to 486 million servings), followed by Latte (467 million) and Americano (which saw notably speedier growth at 33%).

Chill out
In addition to the traditional old guard, the coffee house offers new kinds of drinks. Take the rise in iced and blended beverages. With an 18% growth in 2016, this sector has seen an estimated £338 million turnover. Allegra World Coffee Portal found that 2016’s 3.8% sales share of total coffee shop market sales had grown from the previous year’s 3.6% share. Part of this positive pattern is a result of more coffee shop operators providing a greater range of iced beverages. As a result, more consumers are taking to these whatever the weather, with the Allegra World Coffee Portal report claiming that one in five people are enjoying these all year round.

With that in mind, a new chilled drink is set to be a hit. Having appeared in a limited number of American artisanal coffee parlours and high-end chocolate shops, cold-brewed cocoa is predicted to grow in interest. While the taste is said to be less acidic than coffee, cold-brewed cocoa has been described as a nuanced and nutty taste experience that still possesses the faint aroma and flavour of chocolate. Starbucks has already introduced a ready to drink Cold Brew Cocoa & Honey into selected American stores, and has already garnered media interest as a means of using cocoa in cold drinks other than chocolate milkshakes.

Not our cup of tea?
It could be argued that the coffee shop’s rising through the ranks comes from our own changing tastes. Once upon a time, the common choice of drink for Brits was the good old cup of tea. But according to recent Mintel reports, younger generations are not such big fans of that one-time special brew. The report claims that one in five Britons aged 16 to 24 don’t drink tea so much because it tastes too bitter. It’s a bittersweet rise (at 21%) from the 10% of 55+ consumers who said the same thing. The youthful preference for sweeter drinks also accounted for the lower appreciation of tea, with one in six under 25 shunning a cuppa for something with a more sugary taste.

Anita Winther says that tea remains under pressure from a barrage of competition from other drinks. “While coffee has successfully injected connoisseur, indulgent and on-trend elements to the category, tea continues to struggle to deliver the same experience. This poses a marked threat to the category. Where tea has failed to establish itself as a menu staple for younger adults, it is likely to struggle to gain ground in their drinks repertoires later on.”

However, all may not be lost with the future of tea as specially flavoured teas such as fruit teas, herbal teas and spiced teas are regarded as a refreshing alternative to sugary drinks. Mintel noted that 56% of 25-34-year-olds considered flavoured teas as their chosen option. Anita Winther explains that this age group has the widest repertoire of tea, which reflects their more adventurous attitude towards food and drink, with a greater tendency to seek out new foods and flavours to try. “While sweet flavours have been around in the tea market for a while now, these launches will help grow tea usage among younger consumers.”

Cacao tea may also be this age group’s cup of… tea! Made from the nibs and husks of the cacao bean, this hot drink is a centuries-old beverage from South America. Online UK-based tea retail shop, Teapigs also offers a Chocolate Flake Tea, which combines black tea, cocoa beans and chocolate flakes.

Waste management
A growing concern among coffee consumers and coffee shops is how to reduce wastage. Recently, a scheme was launched in London with the aim of preventing an annual amount of five million cups from the Square Mile ending up in landfill.

The incentive was a year’s free membership for services by UK collection and recycling company, Simply Cups. The first 30 businesses that have more than 500 employees would qualify for this service, with the collected cups recycled and remade into other items. Simply Cups already works in conjunction with Costa and Pret a Manger, collecting cups from selected outlets. Costa has also taken on waste management company Veolia to collect used cups from 2000 stores for recycling. Meanwhile, Starbucks has also trialled the Frugalpac: a fully recyclable coffee cup.

“The concerted efforts of coffee shops to cut down on coffee cup waste, following the recent documentary Hugh’s War on Waste, puts them at a competitive advantage by highlighting the fact that the sector as a whole feels obliged to be more ethical,” says Trish Caddy. “Recycling companies and packaging suppliers are making inroads by innovating in systems to recover and recycle existing materials, such as placing recycling bins in branded coffee shop chains as a collection point.”

As for the general future of coffee shops, a positive picture is served up, albeit with the caveat of the problems posed by Brexit. The Allegra World Coffee Portal report says that Brexit could pose a number of issues with respect to labour and the growing pressure on costs.

But the same report also predicts a strong future. By 2025, it is said that the total coffee shop market in the country will exceed 32,000 outlets, with a turnover of £16 billion. Five years after that, the report predicts that the amount of pubs in the country will be outnumbered by the amount of coffee shops.

With more independent coffee shops and outlets set to grow by that time, this really is the perfect blend.

Consumer opinion: think eco
Mintel has conducted research into the environmental habits of coffee drinkers. 87% of those surveyed aimed to get rid of their packaging waste in recycling bins. 58% thought that a good idea for coffee shops would be to introduce a discount for customers who brought along their own mugs. Meanwhile, 40% of coffee consumers claimed that they would rather be charged extra money for being served hot drinks in 100% recyclable coffee cups.

Cost pressures risk sector job creation, warns UKHospitality

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Cost pressures risk sector job creation, warns UKHospitality

UKHospitality has warned the Government that taxation and regulatory pressures risk undoing the good work and job creation carried out by the hospitality sector since 2008.

The warning follows the publication of data by the Office for National Statistics that shows 31,000 fewer jobs compared to same period last year. The data highlights a 3rd consecutive quarter of contraction in jobs numbers and 92,000 fewer jobs compared to peak of Q2 2017.

Despite this, the number of jobs in the sector is still nearly 400,000 more than at the end of 2008.

UKHospitality Chief Executive Kate Nicholls said: “The hospitality sector has done a fantastic job at creating opportunities, revitalising high streets and stimulating growth since the financial crisis. The sector has been a major driver of employment, creating 1 in 7 of all new jobs despite increasing cost pressures and legislative restrictions.

“The new data from the ONS suggests that these cost pressures are becoming too much for some employers and, consequently, we are looking at a reduction in the number of jobs compared to last year. It also seems no coincidence that the reduction in jobs should follow so closely from the disastrous business rates revaluation that has heaped more pressure on venues.

“We have been vocal and persistent in our message to the Government that if businesses continue to face spiralling taxes, they will struggle to invest and grow and, ultimately, jobs will be at risk.

“The sector is still in a very strong position and has an opportunity to continue creating jobs and revitalising communities around the UK, but only if exorbitant and destructive costs are tackled by the Government.”

They Walk among Us, Barrel Dregs (229)

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They Walk among Us, Barrel Dregs (229)

One from the Archives.

Please note, access to this site is totally free if you would like to subscribe (No Charge) on www.buyingapub.com, they are free to be read for your guidance and aimed to help you get through a time of considerable pressure and demand.

Barrel-Dregs has been run for many years, we change all the identifiable details, but give you an insight as to many of the sharp or bad practices by a number of companies, in most cases they are just legal but morally unacceptable.

We have a number of Pub owning companies that we will not recommend, their actions have featured in Barrel-Dregs too many times, we did hope that by highlighting their antics they might change, but in Barrel-Dregs terms “Leopards do not change their spots, they cover them with more Mud.”

Enterprise Inns at it’s glorious best

The UK’s favourite caring sharing Pub Co, they are your business partners, they don’t aim to influence your business and social activities, just control even the simple pleasures in your life, its bad enough living over the shop, but to have to drink their vastly over priced or under discounted products, whichever way you look at it, is beyond belief.

The BDM may have lost the very few marbles that he has left or his boss is a completye numpty, putting it politely, assuming that the following is correct, sadly it is not the first report on this childish attitude by a Pub Co.

My business partner lives in a flat above the pub we lease from EI – we are currently subject to injunctive proceedings from them for suspected breach of lease terms.

As part of the negotiations for the consent order they specified that he cannot and must not consume any tied products in his flat (on his own time) that aren’t purchased from EI themselves.

Going to Sainsburys or the offie and buying a couple of beers (at non tied pub prices of course) to enjoy on his rare nights off are a no no, and we also have to refuse samples from brewers etc unless they are immediately moved from the premises and consumed elsewhere.

The really are throwing the beer cans out of their pram.

Cellarman

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees are made fully aware of many hidden pitfalls.

 

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Barrel Dregs, whose at fault, Pub Co or Tenant?

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Barrel Dregs, whose at fault, Pub Co or Tenant?

One from the Archives, for the unwary.

There are still lambs going to the slaughter house in the interests of fulfilling their dreams.

Strangely it’s other Tenants that are acting as the goat that walks through the slaughterhouse in front of the lambs, and walks down the ramp the other end scott free.

Is it the Slaughter House, the Goat or the Lambs that are to blame.

Make your own mind up from the following true and salutory tale.

A Pub Co pub near Pot Boy in a major village within commuter distance of London.

Current Tenant been there for three years and despite all efforts, lost everthing in pursuit of the dream.

Pub on the market for about nine months at £85K.

In the end she accepted just under £40K. Pub is fully tied with three other soundly trading pubs in opposition (two part tied,one free of tie).

Pot Boy reckons that sales are about £200K with known rent at £38K.The pub is now a financial basket case and there are an alarming number of things that need repairing just looking up at the front of the place.

Anyway, back to the point.

The people that moved in two weeks ago have virtually no operational trade experience.

He is a chef with six years behind the stove, she was an accounts manager in a Building Society.

They have both done a bit of bar work “to learn the trade” and they told PB that they both attended a three day residential training course.

The Pub Co was happy with their business plan, which was going to change the food and increase trade,and promised them extensive trade support,which looks like expensive accountancy monitoring to PB.

Nobody seems to have said anything about putting  quite a big building back into good nick.

Within two weeks the trade has bombed.

She is a natural born fighter, unfortunately with the customers would you believe it.

He is scared stiff of front of house and produces pub grub food from the safety of his sanctuary, pardon, kitchen.

The part time bar staff,who were always paid cash money (dosen’t upset the benefits and all that ) have all gone because they were to be paid legit.

PB is looking at a pub proceeding swiftly to the scene of an immediate financial disaster.

So who is to blame,everybody or nobody.

Can’t fault the ex tenant for wanting to get out having lost everthing.

BUT she was for certain economical with the truth about the trade losses and never produced a proper set of accounts either to the Agent she used for the sale or the new people (PB has seen the Agents details-should have been signed off by Enid Blyton).

The new people have realised a dream in running their own business BUT didn’t get a survey done and produced a crackers business plan that was to any sane mind a no brainer.

The Pub Co are not the selling party, they didn’t select the new Tenant and have washed their hands in sterile water over what was said to who over the deal that was struck.

BUT they accepted a bonkers business plan, forgot about the repairs of the building (front looks pretty shabby so the back can’t be too clever),and are clearly happy with the level of experience and suitability of the new people who had the money,and produced rent in advance and the security deposit.

On balance the Pub Co COULD have stopped the sale in its tracks BUT if they did the pub would have probably shut through insolvency (seemed to be on the knife edge) and who knows,the new people might have made a go of it. Behind the scenes you could blame other hidden culprits .

The rent was/is far too high and because of the tie, the retail sale price was always going to be  just too much (the beer was always the highest priced in the village until the last lady brought the prices in line and presumably crippled her margins).

Would it have been fair to the last tenant to stop the sale and let her take the financial slap in the kisser ?

Would it have been morally wrong to stop the new people from living the dream ?

SHOULD the Pub Co make a judgement call on obvious lack of operational experience.On the last point, Pot boy says  a big big YES !!

Yet again a big property company that happens to own pubs, is at the center of a sticky web leading to the slow death of pubs that could so easily have been saved.

Back to the cellar this time with the tin hat on.

Pot Boy.

Please Note:- We are not trying to discourage buying and selling of leases, we just want to discourage the legal Rip-Offs that go on, we firmly believe that those taking up a fair Market Rent Option, as it stands at present, could have leases worth serious money, though a number of Pub Co’s will fight tooth and nail to stop this improvement.

The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsiblity for them, we do try to avoid offensive or litigious statements being made.

copyright (©)2015, www.buyingapub.com

MRO and the “PUBS CODE ADJUDICATOR”?????

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MRO and the “PUBS CODE ADJUDICATOR”?????

PUBS CODE ADJUDICATOR

This has been a litany of bureaucracy, frustration and, at times, mind-numbing procedural delays. It would seem that even the Business, Energy & Industrial Strategy Committee has now lost patience with Paul Newby, the Pubs Code Adjudicator. The Clerk to the BEISSC, Chris Shaw, has confirmed that the letter from Rachel Reeves MP, Chair of the BEISSC, has written to Paul Newby on 10th October and that that letter has been openly published on the BEISSC website which can be found at:-

http://www.parliament.uk/documents/commons-committees/business-energy-and-industrial-stratagy/correspondence/correspondence-from-the-chair-to-paul-newby-office-of-the-pubs-code-adjudicator-16-october-2017.pdf

To quote from the third and fourth paragraphs of that published letter:-

in particular, how many tenants have obtained new MRO Agreements; how many tenants have been through the entire MRO process and obtained an independently assessed rent? How many Arbitration decisions have you made and how many applications are awaiting decision, and what steps have you taken to ensure timely decisions are taken?

What assessments have you made about the workings of the Code and its enforcement following the verification exercise you commissioned which reported in August? What representations have you made to the Ministers on the effectiveness of the Code and the way that the MRO process is being followed by pub-owning companies and tenants? It would be helpful to have a response by 26 October.

From our viewpoint, cases that started off in September 2016 and all subsequent cases, almost all of which represented precisely the same thing, namely the validity of MRO only being granted under the terms of a five year lease, set against either a free-of-tie release letter or Deed of Variation have not received one single Arbitration Award which establishes that principle. It is absolutely scandalous that over a year has now passed with absolutely nothing on this core issue for which there are countless applications. We are still continuing to file such applications on a regular basis knowing that, at some stage, surely an Arbitration Award must be issued to ratify the principle concerned. The domino effect could be dramatic ..BUT¦

Should the decision go against the Pubcos and Brewers affected by the legislation, we have heard said many times that certainly two of the Pubcos would then instigate an appeal to the highest Courts in the land. We all know that the senior judicial system moves exceeding slow in the consideration of such a situation. Much is at stake, specifically because if the decision is upheld it would favour either a Deed of Variation or Tie Release letter and, in so doing, would then achieve the underlining will of Parliament that was to make the consideration of the MRO Option a relatively straightforward affair. That would then be the thin edge of the wedge for companies wholly dependent upon a massive slice of income from wholesale contribution.

Yes, it may take years but if the route to MRO is made relatively straightforward, suddenly there would be a King’s New Clothes moment of recognition and the penny will drop that servicing massive toxic loans might not be the easiest thing in the world if there is a dramatic and continuing reduction in wholesale contribution or what is sometimes known as the wet rent if tied publicans can find a straightforward avenue for MRO.

YET ANOTHER ROUTE OF APPEAL AND DELAY

An emerging unforeseen black hole in the Pubs Code legislation is that of the rental determination by the Independent Assessor. If you look back at other methods of Third Party Referral RICS Arbitration, RICS Independent Experts or the Independent Expert appointed under the PIRRS system, – the Determination as it is called (not an award) is absolutely final and binding on both parties. The PIRRS Third Party Referral requires a distinct and separate Deed of Variation which confirms the binding nature of the outcome. So far all fairly simple and straightforward.

However, under the Pubs Code the Independent Assessor Determination surprisingly is not binding on both parties. This has resulted in quite a large number of immediate appeals by the Pubcos against the rent that has been decided, fundamentally because they don’t like the answer. Referrals have been made to the PCA (which is perfectly legal) under Regulation 38(4)(a) and, just to remind you, the associated wording is as follows.

MRO procedure where a referral is made to the Adjudicator in connection with the Independent Assessor..(4) where the pub owning business or the tied pub tenant considers that (a) the rent determined is not the market rent.

So if you don’t like the rent for the basic reason that it isn’t high enough (landlord) or it isn’t low enough (tenant), you can refer the whole affair to the Arbitrator, Paul Newby. Further delay and on and on.

There is, however, one very big problem which we have highlighted in a recent case to the PCA which goes something like this.

The Complainant is saying that they don’t like the rent conclusion. What they are saying is that the Independent Assessor (IA) has got it wrong. However, the Independent Assessor who has to issue a detailed written Determination and associated reasons has been acting as an Independent Expert. Those investigations and associated reasons are not constrained by the Arbitration Act and are certainly not constrained only within the bounds of the evidence presented. It is not the evidence presented that is being questioned, it is the interpretation of that evidence that has resulted in a rent that one of the parties does not like. If he asks for an expansion of reasons/evidence linked to the case presented to the Independent Assessor, more problems. That would be NEW evidence not considered by the Independent Assessor.

Now we have the big problem! Paul Newby is an Arbitrator, not an Independent Expert. For him to delve into the thinking process of the Independent Assessor he would have to take on the mind-set of an Independent Expert. This he cannot do acting as an Arbitrator under the constraints of the Arbitration Act 1996. Having posed the problem to the PCA, we are still awaiting an answer.

All the best from the Team at M & C

Email: nigel@morganandclarke.co.uk

Phone: 01285 719292 and 01285 760370

Note:-This article was written six months ago as a result of frustration by various people, from the lowest to the highest, we wrote two weeks ago and got a brief acknowledgement and nothing about the serious problem that exists, nothing changes. (May 2018)

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Mobility and retention two key concerns for the hospitality industry

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Mobility and retention two key concerns for the hospitality industry

 

HR leaders from across the hospitality industry today (9th May 2018) told politicians that mobility and retention are two key concerns for the wider industry.

The first session of the Hospitality Workforce 2030 Commission focused on recruitment and retention in the hospitality industry and heard from Tom Hadley from the Recruitment & Employment Confederation, Jo Childs from Yo! Sushi, Alison Gilbert from CH&Co and Pauline Chidgey from Stonegate Pub Company.

Speakers and politicians discussed issues such as stigma, the Apprenticeship Levy and the need for a balanced evidence-based immigration system. A number of the speakers highlighted their disappointment that the catering and hospitality T level will not be introduced until 2022 and called on the government to bring it forward.

There was also positive discussion about the benefits of using real life stories to engage potential employers and the need for national campaigns to increase visibility, awareness and potential of the industry.

UKHospitality Chief Executive Kate Nicholls said: “The UK’s hospitality sector is a dynamic and resourceful one, but it still faces barriers to growth, particularly regarding employment. The Hospitality Workforce 2030 Commission will establish a comprehensive picture of the opportunities facing the sector and allow us to challenge perceptions and promote and enhance the work hospitality businesses already do.”

Co-chair of the first evidence session and Chair of the APPG for Beer Mike Wood MP said: “The ability to attract and retain staff came across as two immediate issues for the industry.  We need to make sure that employees who are looking to develop a career in hospitality are aware of the opportunities on offer and the potential future career pathways available to them.  I’m looking forward to hearing more views and working with my colleagues and UKHospitality to develop tangible asks for both industry and government.”

The Hospitality Workforce 2030 Commission, organised by UKHospitality, aims to promote understanding of the importance and potential of the UK’s hospitality sector and brings together a wide range of hospitality employers and All-Party Parliamentary Groups, along with other stakeholders, industry bodies and authorities, to deliver an employment foundation for the sector.

Michael Tomlinson MP for Mid Dorset and North Poole who will co-chair the next session said: “Today’s session highlighted the untapped potential of the hospitality industry. I’m looking forward to co-chairing the second session on the diversity of the workforce, which will help identify how we can offer further support and career opportunities for all those working in the hospitality sector.”

The second session on 12th June will focus on diversity of the workforce and will be co-chaired by Liz Saville Roberts MP, Vice-Chair of the APPG for Tourism and Hospitality Industry in Wales and Michael Tomlinson MP, Chair of the APPG on Youth Employment.

A written call for evidence and staff questionnaire are currently open to the public and close on Friday 25th May.

http://www.almr.org.uk/uhospitality-commission-2030/

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JG&Partners, “Protecting your business?” £5,000 fine for failing to display Food Hygiene Ratings

“Protecting your business?” £5,000 fine for failing to display Food Hygiene Ratings

A recent case at Cardiff Magistrates Court, in which a business owner was fined £5,000, highlights the obligations businesses have to display their food hygiene ratings, in Wales and Northern Ireland.

The case surrounded a restaurant which had been given a Two-star rating,  following a visit by environmental health officers in 2017.

By Law the rating must be displayed “close to the premises where it is capable of being easily read by the customer before they enter”.

On a number of occasions the authorities attended and found they were not satisfied the sticker was being displayed correctly,  they were told by the restaurant owner “he was protecting his business by not displaying the food hygiene rating”.

As a result of not displaying it correctly the owners application for regrading was refused by the Council.  The authorities then proceeded to prosecute the owner for six offences to which he pleaded Guilty at court.

Councillor Michael Michael, cabinet member for shared regulatory services, said of the case:

“This case shows a blatant disregard for the legislation that is in place….” and  “the purpose of the legislation is to give the customer the choice whether they want to eat in the restaurant or not. If [the owner] wants to protect his business, I would suggest that he gets his business in order and operates in line with the law.

In England, the displaying of the Food Standards Rating is voluntary. 

The FSA (Food Standards Agency) are calling for this to be changed; 

“Mandatory display is part of the FSA’s plans for a new model of regulation but implementation will require legislation,” a spokesman said.

“We want to bring the food hygiene rating scheme in England in line with Wales and Northern Ireland, where the benefits of more visible ratings have already been felt.”

We will monitor the position.

Should you face any regulatory issues regarding your business, make sure you obtain Legal Advice, our teams are available and able to respond on 0114 266 8664.