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Pub Landlords Tied To Big Breweries Win 'historic Victory' In Commons Bill

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Telegraph 18/11/14

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Pub landlords have won a “historic victory” over changes to their relationship with the big breweries, which could set them free from the controversial “beer tie” system, business groups have claimed.

The system, with its restrictions on the purchase of drinks from competitors and limits on freedom of rent agreements, has been blamed for the increase in pub closures, uncompetitive prices and the failure to attract more tenants.

However, pub trade body the British Beer & Pub Association (BBPA) has said the changes will be “hugely damaging” to the industry and could result in 7,000 job losses.

MPs on Tuesday backed the amendment to the Small Business Bill tabled by Lib Dem MP Greg Mulholland, which aimed to help to secure fair rents and cheaper beer prices for licencees tied to big pub companies.

Almost 20,000 pubs have shut over the past 20 years and a survey by the Campaign for Real Ale showed almost 60pc of landlords in tied tenancies earned less than the national minimum wage equivalent salary of £10,000 a year.

Under the new Bill, publicans would have the right to take any pay disputes to an independent adjudicator, who would have the power to enforce the new code.

All tied tenants would have the right to request a rent review if they have not had one for five years. An amendment added by Coalition MPs would also allow all pub landlords to buy beer on the open market.

Landlords that lease pubs from large companies say this could save them 60p a pint.

The Campaign for Real Ale, which has campaigned for 10 years for the changes, said it was a “victory” for beer drinkers, pub goers and licensees.

“Allowing over 13,000 pub tenants tied to the large pub companies the option of buying beer on the open market at competitive prices will help keep pubs open and ensure the cost of a pint to consumers remains affordable,” said CAMRA chief executive Tim Page.

However, industry body the British Beer & Pub Association, whose members own around 20,000 of the nation’s pubs, said the changes could do more damage to the already troubled industry.

“This change effectively breaks the ‘beer tie’, which has served Britain’s unique pub industry well for nearly 400 years. It would hugely damage investment, jobs, and results in 1,400 more pubs closing, with 7,000 job losses - as the Government’s own research shows,” BBPA’s chief executive Brigid Simmonds said in a statement.

Mr Mulholland had accused the trade body of “scaremongering”. “The big brewers and pubco association... have been lobbying vociferously with a whole stream of utterly baseless comments,” he said in his speech to the House of Commons.

Heineken, the brewery group whose Star Pubs & Bars unit has 1,300 leased premises, said the proposals "would threaten that partnership and make it more difficult for people to enter the market and own their own pub. We urge Parliament to think again before this poorly thought out proposal becomes law".

BBPA say Beer tie has served the industry them very well over the years.

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Absolutely right: I cannot believe that it took a rebellion in parliament to pass this. Too late for poor sods like Kurt's brother, but a massive victory for the pub going public. Makes me despise the coalition leadership even more that they didn't think this was simple common sense.

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Goodness me!

When back in Blighty, I lose track of how many times I go into a pub to see them serving the usual rubbish of Stella, Heineken, etc etc. If there's another pub nearby with real beer, we'll often move there. This will help good landlords grow good business.

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Absolutely right: I cannot believe that it took a rebellion in parliament to pass this. Too late for poor sods like Kurt's brother, but a massive victory for the pub going public. Makes me despise the coalition leadership even more that they didn't think this was simple common sense.

Didnt the 'free market' tories try and stop this.

Funny how the trials and tribulations don't apply in toryland if you are a big business.

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Brewery share slumping this morning. Quelle Surprise.

One of my local pubs is Enterprise Inn owned. Excellent real ale but the leaseholder has to buy it through the owners so he is one of the priciest pubs around. It will help him a lot and will actually encourage competition, but some people don't like that!

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'free market' tories

Been a joke for a long while, which is why I don't give a damn about them anymore.

Historically they were the rentier party, under Cameron they've reverted to type. I don't even hear them talking the language of aspiration anymore - unless the aspiration is to be a landlord.

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Well this is interesting. Presumably the consumer will experience lower prices? Although maybe Osb' will raise the duty or unwind some tax benefits to counteract the fall ? Edited.

Edited by Ash4781

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Nothing more disappointing than going into a nice pub for a lunch and only having boddingtons or similar piss to choose from. I will go out of my way if a pub has good ales especially a variety of ever changing guest ales.

Derbyshire is particularly good beer ticking country. I still call them real ales I hate the term "craft" beers.

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Excellent news (for a change). Trying to see what the catch is

Too many pubs still tied to the brewary under rental tenancy I would assume.

It won't be that thousands will close due to this ruling directly as it's a great thing for pub landlords and their custom. The knock-on effect will be rent rises (bigger than the ridiculous ones they already try and impose to cause high tenancy turnover) that they've probably already factored in to future budgets should this ruling not go in their favour which it hasn't.

Hopefully we'll see a lot more independent pubs being setup and the whole brewery chain model will collapse completely.

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^^^ +1. I wouldn't count on cheaper beer. What's in it for the brewery companies if their tie is ended? More likely they'll identify pubs that would 'underperform' (for them) without the bonus of tied alcohol and, for example, apply to demolish the building and turn it into houses (yay!) or something else to make money rather than take the hit in income.

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Some people would be happy to only earn £10k a year if they got a roof over their heads and access to all the beer slops they could drink.

Personally, I'm overjoyed to find the same limited range of fizzy rubbish in every pub. It saves my guts and palate from having to adjust to different ales, plus all the gas helps to stop me drinking too much before it goes through me like an armour piercing shell and I get caught out in the underwear department, so to speak.

.

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^^^ +1. I wouldn't count on cheaper beer. What's in it for the brewery companies if their tie is ended? More likely they'll identify pubs that would 'underperform' (for them) without the bonus of tied alcohol and, for example, apply to demolish the building and turn it into houses (yay!) or something else to make money rather than take the hit in income.

Fortunately councils have become much more wary of this and are approving fewer conversions. Also more pubs are being registered as assets of community value (ACV) which is stymieing attempts to turn pubs into Tescos and flats.

Property developers are now seeing the pub conversion as higher risk and this will feed into lower prices.

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http://www.bbc.co.uk/news/business-30114911

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I've heard from other landlords that pubco's rely on those who have had a payout - be it from ex military or those who have a redundancy payout to waste...They say "want to run a pub with twenty grand"...sounds tempting...often they start with a low rent...if they make a moderate success of it, they jack up the rent, and it gets so expensive, that they have to call it quits...just rinse and repeat..

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Fortunately councils have become much more wary of this and are approving fewer conversions. Also more pubs are being registered as assets of community value (ACV) which is stymieing attempts to turn pubs into Tescos and flats.

Property developers are now seeing the pub conversion as higher risk and this will feed into lower prices.

This just seems to be a recipe for pubs to stand derelict.

I have a feeling that outside of cities pubs are finished as a viable business whatever tinkering around the edges. I could imagine similar jubilation would result from car parking charges being removed from high street car parks the shops still wouldn't be viable.

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This just seems to be a recipe for pubs to stand derelict.

I have a feeling that outside of cities pubs are finished as a viable business whatever tinkering around the edges. I could imagine similar jubilation would result from car parking charges being removed from high street car parks the shops still wouldn't be viable.

No evidence for your first statement. Pubs are viable business, just the pubcos extract far more from the business than is feasible for tenants to make a reasonable living.

No evidence or logic for your second. Why are pubs not viable outside of cities?

The pubco ties have been killing off pubs. The rise in property values is wonderful news for the pubcos - they no longer even need to run a business well - they just sell off properties to generate revenue, to cover the gaps left by their broken, shameful, business model.

If Enterprise Inns and Punch Taverns were people they would be called Judith and Fergus Wilson.

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No evidence for your first statement. Pubs are viable business, just the pubcos extract far more from the business than is feasible for tenants to make a reasonable living.

No evidence or logic for your second. Why are pubs not viable outside of cities?

The pubco ties have been killing off pubs. The rise in property values is wonderful news for the pubcos - they no longer even need to run a business well - they just sell off properties to generate revenue, to cover the gaps left by their broken, shameful, business model.

If Enterprise Inns and Punch Taverns were people they would be called Judith and Fergus Wilson.

You'd probably find that Wetherspoons / Lloyds bars have skilled off a lot of town centre pubs. As for pubs outside of centres? I'd say they're more profitable that a lot of city centre pubs. Admittedly, most of them have become gastro pubs, but the one's I go to - often in the middle of the sticks, are heaving, even on Sunday nights...chuck on the odd pub quiz to help, and you're sorted..

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