Change to Small Business Bill could save British pubs » SMEInsider

Change to Small Business Bill could save British pubs

This week, MPs will vote on whether to amend the Small Business Bill so that publicans are released from rules that force them to buy beer from their owners.

Around a third of pubs in the UK are owned by large-scale breweries or companies, known as pubcos, which oblige landlords to buy their beer direct from them, in an arrangement called the “beer tie”. However, many landlords argue that stripping out any competition leads to overinflated prices – pushing up the costs for the consumer by up to 50% per beer, according to the Fair Deal for Your Local Campaign.

This is thought to play a major role in the escalating number of pub closures, which hit 31 per week earlier this year.

If the cross-party amendment is passed, pubcos that own over 500 pubs will have to release them from the beer tie, allowing them to buy from the free market. As a result, landlords could be up to £4000 better off per year, while offering more competitive prices to customers. Campaigners hope that the change would see the return of a thriving pub culture, especially in suburban areas.

Liberal Democrat MP Greg Mulholland, who tabled the amendment, said:  “MPs up and down the country know from their own constituencies that pubco publicans have been treated badly and charged unfair and unrealistic rents and rip off prices for beer, that their own MP could buy much cheaper.”

“It really is time to resolve this issue once and for all and the only sure way to do this is to include the market rent only option for pubco tenants in the measures being introduced. The market rent only option, as clearly laid out in the new clause, is reasonable and gradual and simply provides an option to tenants to choose at appropriate times whether to carry on with a tied agreement or to have a rental only agreement.”