Publicans demand radical rethink on tenant ties with pubcos

Publicans are calling for a “radical rethink” of the relationship between the major pub companies and their tenants starting with the removal of the beer tie.

Controversy over the beer tie – the exclusive purchasing obligations between pubcos and their tenants – reached its zenith last month when a group of MPs demanded that the tied business model is referred to the Competition Commission.

Nicky Francey, who runs the Scottish & Newcastle Pub Enterprises-tied Sun & Doves pub in Camberwell, south London, agreed, but said the beer tie is just one part of the picture.

“The tie is an easy hook, but the real point is the imbalance in the relationship between the pubcos and the tenants,” she said.

“The main problem is that there is no trust left and the model needs to be changed. It is not good enough for the pubcos just to say they will be nicer to us, there needs to be a radical rethink.”

Wayne Hodgkins, owner of the Fleur de Lys hotel in Sheffield, said he was forced to end his tie agreement with Enterprise Inns.

“If we buy a 22-gallon keg of Carling from Enterprise it costs us £253.65 but you can go to the wholesaler and get it for £150,” he said. “If we were still buying from Enterprise we would not be open.”

Enterprise chief executive Ted Tuppen has insisted that the tied model provides low-cost method of entry for those who would otherwise have been unable to afford to buy a pub of their own

John Grogan, chair of the All-Party Parliamentary Beer Group, said reforming the beer tie is the favoured option of most MPs as any move to abolish it may just consolidate the position of the large brewers against the smaller ones.

For more on this story, see our cover feature on 5 June.

MPs accuse pubcos of 'downright bullying' of tenants >>

Enterprise Inns and Punch Taverns hit back at damning beer-tie report >>

Industry rejects MPs' call for beer-tie investigation >>

Licensees want beer-tie plans to be scrapped >>

Up to 30% of beer-tied pubs uneconomic, warns analyst >>

By Daniel Thomas

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