Pulse.Assent

Paul Newby and Fiona Dickie have today published statutory advice to provide clarity on the terms of Market Rent Only (MRO) tenancies following recent arbitration awards.

The PCA and Deputy PCA have reiterated the important point that a MRO proposal does not have to be by way of a new agreement. The advice stresses that it is the content rather than the form that is important.

Whatever the form of the individual MRO proposal, the terms have to be reasonable and consistent with the core principles of the Pubs Code; that there should be fair and lawful dealing and tied pub tenants should be no worse off than they would be if they remained tied.

“MRO is not the same as a negotiation on the open market and the pub-owning business should not take advantage of the fact that a tied pub tenant has limited negotiating power.

“The PCA will be likely to find it unreasonable for the pub-owning business to offer unattractive MRO tenancy terms if the intention is to persuade the tenant to stay tied,” the advice states.

The PCA expects pub-owning businesses to have meaningful negotiations with their tenants seeking a MRO tenancy. Tenants should not need to rely on arbitration by the PCA to get their Code MRO rights. Referrals for arbitration should be the exception and not the norm in the future.

Paul Newby, Pubs Code Adjudicator, said: “I understand that both sides of the industry have been looking for clarity on this issue and I am very pleased that following arbitration awards made by the Deputy PCA and myself we can now provide this statutory advice.

“The ability for a tied tenant to go free of tie is an important right introduced by the Pubs Code. Tenants have been facing high costs in pursuing MRO and we need to ensure these unnecessary barriers are eliminated.

“This advice gives a strong yet simple steer on what pub-owning businesses can reasonably ask from their tenants in a MRO-compliant tenancy and is a major step forward in delivering the MRO rights that Parliament has given tenants. I expect it to lead to meaningful negotiations that mean arbitration becomes the exception in the future.”

Fiona Dickie, Deputy Pubs Code Adjudicator, said: “The Code is legally complex and uncertainty surrounding the meaning of the MRO process has caused frustration. This advice will be a useful tool in clarifying for the benefit of all what the Code requires and how its two core principles should be applied in practice to the MRO proposal.

“It is designed to support effective, balanced negotiation between tenants and pub-owning businesses, and reduce the number of cases that are referred for arbitration. I am confident that the arbitration process will now more efficiently and proportionately resolve any remaining MRO disputes where the parties cannot reach an agreement.”

Note to editors
The full statutory advice is available on the PCA website www.gov.uk/pca

FCO Minister Mark Field will meet Angel Gurria, Secretary General of OECD on Monday (5 March) for discussions on their work on the Asia region.

Mr Field will also meet representatives today (2 March) from the French Government for talks on UK-French cooperation on the current challenges in the Asia region, including Burma and North Korea, and will attend a meeting at the British Embassy with Ambassadors and representatives from ASEAN countries. Minister Field will also discuss international energy priorities with International Energy Agency Executive Director Fatih Birol.

Speaking ahead of the visit to Paris, Minister for Asia and the Pacific Mark Field said;

I look forward to productive meetings in Paris, including with Angel Gurria, Secretary General of the Organisation of Economic Co-operation and Development, to explore how their work can support UK priorities in the Asia region. The UK is already a strong supporters of the OECD’s South East Asia Regional Programme and my visit will be an opportunity to strengthen our work further.

I am also looking forward to discussing important issues across the Asia region with my French counterparts. There is increasing convergence with our French colleagues on many of these issues and we deeply value the work we do together.

Further information

• Follow Foreign Office Minister Mark Field @MarkFieldUK
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CPL and Fuel Express are 2 of the main suppliers of bagged household fuels, including coal and firelogs, and charcoal for barbecues, to large national supermarkets and petrol stations.

They have agreed to pay the fines for breaking competition law after a CMA investigation led them to admit rigging competitive tenders to supply Tesco and Sainsbury’s. For each of the tenders concerned, they agreed that one of them would submit a higher bid that was designed to lose – so that the existing supplier could retain ‘its’ customer. This is a form of bid-rigging under which competitors share out the market between them. They also exchanged competitively-sensitive confidential pricing information.

The CMA’s investigation started after intelligence work following a tip off to the CMA’s cartels hotline led the authority to carry out surprise inspections at the premises of the 2 suppliers.

The investigation revealed that the companies had engaged in this illegal market sharing arrangement from June 2010 to February 2011.

Stephen Blake, CMA Senior Director for Cartels, said:

Millions of people buy these products to help keep their homes warm in winter and to fire up their barbecues in summer, so it’s important that shoppers are offered the best price. This will only happen when companies compete fairly.

Market sharing and bid rigging are illegal. They skew the market so businesses don’t have to compete for customers, who in turn are cheated out of a fair deal and can end up paying higher prices or having to make do with poorer quality products or services.

Today’s announcement shows how seriously we take this type of activity. It’s important that all businesses play by the rules and the CMA will pursue those who break the law.

The CMA has a dedicated reporting hotline for cartels (0203 738 6888) and recently launched a new campaign to encourage more people to come forward with information that will help it stamp out illegal cartel activity.

Notes to Editor

1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
2. CPL (CPL Distribution Limited and CPL Industries Holdings Limited together ‘CPL’) has agreed to pay a penalty of £2,816,514.
3. Fuel Express Limited, Fuel Express (Bagnalls) Limited (previously known as Bagnalls Haulage Limited), Carbo (UK) Limited and G.N. Grosvenor Limited (together ‘Fuel Express’) will pay a penalty of £627,867.
4. These penalty figures are after a 20% reduction for settlement to reflect the fact that the companies have admitted breaking competition law and have agreed to follow a streamlined procedure for the remainder of the case.
5. The penalties will not become payable until after the CMA has issued a formal infringement decision imposing the penalties and setting out the CMA’s findings in full, together with the basis for the calculation of the penalties. The CMA is today issuing a formal statement of objections with a view to issuing a final decision shortly afterwards.
6. Enquiries should be directed to the CMA press team at press@cma.gsi.gov.uk or 020 3738 6191.