Star Pubs & Bars hit with £2m fine
E d i n b u r g h - h e a d q u a r - tered Star Pubs & Bars, the Heineken-owned group with more than 200 pubs in Scotland, has b een hit with a £2 million fine by the Pubs Code Adjudicator after investigators found serious and repeated breaches of the code over three years.
T h e r e g u l a t o r f o u n d t h a t w h e r e a p u b t e n a n t h a d asked to no longer be tied to Heineken, they were still made to sell “unreasonable levels” of the company’s b eers and ciders. At one point 96 tenants who requested a free - of-tie option were told that 100 per cent of the keg beer they sold had to be Heineken brands, the report added.
It was also found that Star, which has thousands of pubs and bars across the UK, insisted that its own code compliance officer must “ensure the code is interpreted to the commercial benefit of Heineken UK”.
A total of 12 breaches were i d e n t i f i e d a n d a d j u d i c a t o r Fiona Dickie warned that other brewers could face similar actions.
S h e s a i d : “T h e r e p o r t o f my investigation is a game - changer. It demonstrates that the regulator can and will act robustly to protect the rights that Parliament has given to tied tenants.
“I will be holding discussions
with all the companies I regulate following my findings ab out how they will ensure they are code-compliant.
“My message is that if anyone previously had any doubts a b o u t my r e s o l u t i o n t o a c t when I find breaches, they can have no doubt now.”
S h e s a i d S t a r p u b s we r e forced to keep selling Heineken brands, which include Birra Moretti and Symonds cider, despite rep eated regulator y inter ventions and clear arbitration rulings from the PCA.
The probe, which is the first ever for the PCA, covers the period bet ween 21 July 2016, when the pubs code became law, and 10 July 2019.
U n d e r a “t i e d ” l e a s e , p u b te n a n t s must b u y a c e r t a i n a mo u n t o f b e e r f r o m t h e i r landlords, but they can ask to break free of the tie using a “market rent only” option.
T h i s a r r a n g e me n t me a n s they may still be required to stock the brewer’s beer – but strict limits have been set on how much they are obliged to
buy since the pubs code came into effect. This is where the PCA found the breaches.
I n t h e r e p o r t t h e P C A d e s c r i b e d S t a r a s a r e p e a t offender and said the company had been given oppor tunities to set itself on the right path “but intentionally or negligently failed to do so”.
It said Star “failed to heed s t a t u t o r y a dv i c e , t h e P CA’S regulator y engagement and l e a r n i n g s f r o m a r b i t r a t i o n a w a r d s . I t d i d n o t e n g a g e f r a n k l y a n d t r a n s p a r e n t l y
with its tenants or meet the standards required of a regulated business when engaging with the PCA. Star Pubs & Bars has some 240 tied, leased and tenanted pubs in Scotland.
The arbitration rulings by the PCA saw Star switch to a tiered approach but the pubs that needed little or no Heineken p r o d u c t s f a c e d h a v i n g t o sto ck 60 p er cent Heineken k e g p r o d u c t s w i t h i n a year.