Beer Tie

Product Information

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. 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. 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.

Independent Family Brewers of Britain chairman Paul Wells said: "It's great news because it does validate the business model that the family brewers have been championing for a long time. 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. Merger activity has accelerated hand-in-hand with globalisation, driven by the search for increased economies of scale and larger markets. While demand for beer in the UK and Europe has remained fairly static, demand in China and the rest of Asia has accelerated. For example, during 2011, sales of beer by volume by AB-InBev grew by just 0.4% in Western Europe compared with an 11% growth in beer volumes in China. In contrast, sales by volume to Easter Europe actually fell by around 5%. The preferred marketing strategy is to focus on non-price competition and developing premium brands which command a higher price. Globally, this means targeting the growing middle classes in China and India who prepared to spend a little bit more on premium brands.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. 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.

He said: “The review into the pubs code must be an honest one, which means accepting the reality, which is that there is no genuine MRO option available to tenants and this must be rectified or it will be clear that the government have and never had any intention to deliver on promises made to parliament.”

Reasons to buy

They say the tied option does not make financial sense for them and the pub would be more profitable – as well as offering cheaper and better beer – if they were free of the tie. The ‘tie’ system refers to the structure of businesses where pub companies buy a pub and then lease it to a tenant landlord who pays rent to the pub company. The agreement also ties the tenant into buying their beer from the same parent company. Proponents of the bill argue it ends an archaic system and will make pubs more profitable. Opponents including the government argue that it will result in pub closures and job losses. 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. 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. The BPC chair, Greg Mulholland, who pushed the MRO option through parliament as a Liberal Democrat MP, said that in its current form “tenants do not have the rights they were promised by ministers”.