LGA slams use of restrictive covenants on pub sales

The use of ‘restrictive covenants’ on the sale of community pubs is unfair and should be banned by competition authorities, the Local Government Association has said.

The issue is to be raised at an Opposition Day debate on pub companies in the House of Commons tomorrow afternoon.

The Department for Communities and Local Government consulted on restrictive covenants in 2011, but has not yet reported back.

Cllr Mike Jones, chairman of the LGA's Environment and Housing Board, said: “We want to see the Government tackling this issue head on, rather than brushing it under the carpet. Hundreds of pubs are being lost forever every year and this is having a devastating effect on communities.

“It is utterly unfair that pubs, many of which have been at the heart of communities for generations, should be shut because of these covenants, which only benefit the big breweries and pub chains.”
 
Cllr Jones added: “No one wants a building to lie empty, of course, if the business isn’t viable. But if a community has highlighted a pub as being important to them, then protection must be provided.
 
“This is all about empowering communities and sticking up for them against the pub chains which are only interested in the bottom line.”

The LGA claimed that the covenants not only stifled competition but also undermined the Government’s own ‘Right to Bid’ policy.

Mike Benner, chief executive of CAMRA, said it was “scandalous” that nearly 600 pubs had been closed with conditions imposed preventing any future purchaser from re-opening the closed pubs.