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Campaign for Pubs slams Pubs Code Adjudicator interpretation of gaming machine tie as a betrayal of pub tenants’ rights

The Campaign for Pubs has written to the Pubs Code Adjudicator, Fiona Dickie, condemning her interpretation of the Pubs Code to allow the regulated pubcos to continue to impose a tie on gaming machines, flying in the face of the stated intention of the Government and Parliament.

The letter slams Fiona Dickie’s decision to allow pubcos to continue to insist that any gaming machines, including fruit machines, are tied, meaning that the pubco continues to take a significant cut of all takings. The letter also criticises the fact she announced this in a media article, rather than publishing this formally. The first that tenants and tenants’ groups heard of Ms Dickie’s interpretation is in this article in the Morning Advertiser.

One of the many controversial elements of the tied model operated by the large pub-owning companies is that they also tie tenants on gaming machines, as well as on drinks and other products. When introducing legislation, the Government agreed to tackle the gaming machine issue in the Pubs Code, stating in 2014 when it announced legislation that:

“The Pub Owning Business must offer the Tenant the option to be free of gaming machine purchasing obligations when agreeing or renewing a Tenancy or when carrying out a Rent Review”.[1]

This was intended to mean that there must be the option for the tenant to be either tied or free-of-tie on their gaming machines.

Yet extraordinarily, Fiona Dickie, who claims she wants to “uphold tenants’ rights” has decided that the only option for tenants who want to have gaming machines is to be tied, a decision which flies in the face of the intention of Government and Parliament.

The baffling interpretation by Ms Dickie means that regulated pub companies can continue to insist on a tie, if tenants wish to have gaming machines.

What makes Fiona Dickie’s interpretation even more extraordinary is that in the Morning Advertiser article where she makes the announcement, she herself states, “The government said tenants would be allowed to have the choice to be tied or not for gaming machines”. Yet then she goes on to say that in actual fact, pubcos can continue to insist on a tie for any gaming machines! That is clearly not the choice intended by Government, which was for there to be a choice of whether gaming machines were tied, or not.

The gaming machine tie is covered in regulation 47 of the Pubs Code. Whilst this regulation in the Code doesn’t directly state that a tied tenant can either be tied or free-or-tie on gaming machines, it does not state, as the PCA has chosen to interpret, that tied tenants can only have gaming machines if these are tied, so to interpret in the way Fiona Dickie has adds to the sense of bias against tenants and in favour of the pubcos that the Adjudicator is supposed to regulate.

The letter from the Campaign for Pubs states “we are therefore both astonished and appalled that you have chosen to interpret the rules in the way you have, to dictate that tied tenants may only have gaming machines if they are tied.  This decision only increases the perception amongst tied tenants that you are not on their side. You certainly do not seek to uphold the rights of tenants as was envisaged by Parliament. You claim in the same Morning Advertiser article to “protect tenants’ rights”, yet this is a very stark example of how you yourself, through your own chosen and deeply questionable interpretation, are actually undermining an important right of tenants, envisaged by Government. It really is extraordinary”.

The Campaign for Pubs is also raising the PCA’s unacceptable interpretation of the Code with the BEIS Select Committee.

Gary Murphy, a Director of the Campaign for Pubs said:

““Here we have another example where the Pubs Code Adjudicator has not undertaken consultation with key players who represent tenants and, as a result, she has made an extraordinarily pubco-biased decision on the interpretation of the Pubs Code that would seem to be prima facia wrong.

“It is incredibly difficult for tenants to reverse PCA decisions like this because they simply do not have the resources to embark on a legal challenge and the PCA have proved previously to be very reluctant to engage constructively on different opinions. This behaviour is undermining the whole purpose of the Pubs Code and must stop, starting with reversing this dreadful decision”.

Greg Mulholland, Campaign Director of the Campaign for Pubs said:

“The gaming machine tie has long been one of the controversial issues of the tied pubco model and one that the Government committed to tackle via the Pubs Code. It is both extraordinary and disgraceful that the Pubs Code Adjudicator Fiona Dickie has decided to interpret the Pubs Code to allow the regulated pubcos to continue to enforce a tie on fruit machines. It was very clearly the intention of Government and the will of Parliament to stop this and to allow tenants to be either tied or free-of-tie on machines.

“This is yet another example of how the Pubs Code Adjudicator is failing tenants and allowing business as usual, it is not good enough and it is time that the Government stepped in and ensured tenants get the rights promised to them when the legislation was introduced”.

ENDS

[1] Pub Companies and Tenants Consultation: A Government Response 2014 (p. 148)

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