Enterprise Inns and Punch Taverns defend beer tie

The UK's two largest pub companies have defended the beer tie model at the Business & Enterprise Committee (BEC) inquiry into pubco power.

But Tuppen insisted the beer tie benefits both parties and claimed that if removed there would be even more closures.

"Were the tie to be removed we would be a straight-forward property company and we wouldn't see anything like the £9m of opportunity we gave to licensees in the last year," he told the MPs.

In a statement on the inquiry, Punch added: "We firmly believe that the tied model continues to provide great opportunities for entrepreneurs to start up their own small businesses at relatively low ingoing costs and directly engenders a wider choice of product for consumers through our pubs."

However, in an unexpected twist, the Association of Licensed Multiple Retailers - which represents the pub industry and was expected to be broadly supportive - said the beer tie is not working.

"It isn't working well because rents and agreements are fixed on a five-year period and are not flexible enough to cope with a catastrophic decline in the economy," said ALMR chief executive Nick Bish. "We don't see its value in modern circumstances."

Licensees want beer-tie plans to be scrapped>>

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

Lords' final decision on beer ties is not the last word>>

Pub companies to come under scrutiny in new Government inquiry>>

By Daniel Thomas

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