Beer Tie

Product Information

It accused pub companies of seeking to scupper MRO applications by any means necessary, including spooking them with eviction notices. The group also cast doubt on the independence of assessments used to set rents.

But she will already be in little doubt as to how many publicans view it. Pub tenants and MPs have been “duped and betrayed”, according to the British Pub Confederation, which said the MRO was little more than a myth. Fair Pint were encouraged by our meetings with MEPs and Commission officials and there is a real concern about the impact of the pubco model on British consumers and individual tied publicans. The tie system also allows people to become pub tenants with smaller personal investments. This helps to make the sector more accessible widening the pool of potential applicants. According to data from the British Beer and Pub Association, there have been 739 MRO applications since the system began three years ago. Only 57 resulted in MRO tenancies. The BBPA, whose members include the six largest pub companies, believe the pubs code is working well. Clarke says he helped draft the pubs code regulations but has still been unable to make them work. He and Law still do not know whether they will get their MRO or end up signing a new tied tenancy with “onerous” conditions. Even if they get their wish, they will have wasted three years of time and money.Being tied also gives tenants access to wider business support: from maintenance to financial and marketing support. Many pub companies highlight this and argue that this support is vital to many of their tenants especially those who’ve come into the industry from other professions. The new rules have kept the same threshold of market share - 30% - under which the exemptions will apply.

Pubs in less affluent areas of Britain are in danger of becoming extinct. They have been priced out of the market by rapacious landlords and the supermarkets. If we don't look sharp we are in danger of losing them forever. While there have been some challenges with parts of the implementation of the code for all involved, the BBPA and the companies covered by the code continue to work closely with the adjudicator and other stakeholders to resolve these,” the chief executive, Brigid Simmonds, said. According to dozens of pub landlords around the country, already wrestling with the rapid decline in the number of Britain’s pubs, the reality has been very different. The small business minister Kelly Tolhurst recently announced the first statutory review of the pubs code and the way it is arbitrated, via the pubs code adjudicator. He and Clarke claim that when they applied for the MRO option, Enterprise tried to attach unreasonable conditions to their new lease that made it unworkable. They were left facing the prospect of spending huge sums on legal advice and hours of time on protracted negotiations. They also felt that the supposedly independent assessors who set the market rent were anything but.

Reasons to buy

Is the end of the beer tie good or bad? The pub industry is complex and there’s no doubt that unscrupulous pub operators may have abused the system. However, there are many operators who invest significantly in their pubs and who recognise that supporting successful tenants equates to successful pub companies. Their view is that the tie forces tenants to pay unnecessarily high prices for their beer which according to CAMRA can be 60 – 70% more than non-tied pubs. This impacts on their profitability and ultimately results in too many pub closures. Challenges arising from supermarket pricing, pub regulation and punitive leases all have a cost. And that cost is a dire selection of the cheapest brands of beer, "ready" meals, poorly trained staff and management, delayed refurbishment, increasingly desperate price promotions and so on. In other words, a disheartening experience for the customer creating a spiral of decline, leading sooner or later to yet another closure statistic. What is it we stand to lose?

T he Competition and Markets Authority exists to promot e competition for the benefit of consumers – therefore it i s disappointing that they are seemingly disinterested in investigating something that will have potentially anti-competitive effects on the UK beer and pub market. David Law and Simon Clarke run the Eagle Ale House, near London’s Clapham Common, and rent the premises from Enterprise Inns, the subject of more than three times as many MRO applications as any other chain. His case was helped by publicity whipped up by the dispute, not to mention romantic regard for the Blue Bell, a 200-year-old pub whose interior has not changed since 1903 and where York City football club was formed.

Competition Commissioner Joaquin Almunia said: "The rules adopted today will ensure that consumers can buy goods and services at the best available prices wherever they are located in the EU while leaving companies without market power essentially free to organise their sales network as they see best."