Star Pubs and Bars has been fined £2m by Fiona Dickie, the Pubs Code Adjudicator (PCA), after it was judged the company “seriously and repeatedly” breached the Pubs Code over nearly three years.
Dickie said her first investigation into the Heineken-owned pub company warranted a financial penalty.
The investigation found the company “persisted” in forcing its tenants to sell unreasonable levels of Heineken beers and ciders when they requested to go free of tie, despite repeated regulatory interventions and clear arbitration rulings from the PCA.
The company was found to have committed a total of 12 breaches by the PCA of the Pubs Code.
Dickie said: “The report of 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 about how they will ensure they are Code compliant. My message is that if anyone previously had any doubts about my resolution to act when I find breaches, they can have no doubt now.”
She added: “It failed to heed statutory advice, the PCA’s regulatory engagement and learnings from arbitration awards. It did not engage frankly and transparently with its tenants or meet the standards required of a regulated business when engaging with the PCA.”
Lawson Mountstevens, MD of Star Pubs & Bars, said the company was “deeply disappointed and frustrated” at the outcome of the investigation and that it is “actively considering” an appeal.
He said: “This penalty is unwarranted and disproportionate, and comes at a time when the entire sector is in serious financial crisis as we work around the clock to support our pubs and licensees to keep their businesses afloat.
“We are a responsible business that takes its regulatory obligations extremely seriously and strives to achieve the highest levels of professionalism.”
He added: “From the outset we have been transparent and repeatedly sought guidance from the regulator on the terms we were offering those licensees looking to take up the Market Rent Only (MRO) option, but the PCA consistently declined to respond to those requests. Instead it chose to launch a long, costly and unnecessary investigation.