Tales of the tie

Tough times mean tough questions - and now, more than ever, tied licensees are challenging the arrangements they have with their landlords.

The tie has been a controversial issue for some time, and the number of complaints coming into The Publican​ from disgruntled tenants and lessees remains high.

The tension between pub companies and their pubs is confirmed in The Publican​ Market Report, where 72 per cent said they would pay more rent to be free-of-tie.

Ted Hedges, licensee at the Enterprise Inns-owned Porcupine in Mottingham, South East London, said: "I would prefer to be paying slightly more rent and less on beer. However, we have just done a complete refurb and Enterprise has done us proud."

Another Enterprise lessee, who wished to remain anonymous, said he was unhappy with the difference in discount freetraders receive compared with tied pubs.

He said he pays £117 for a keg of Carling, compared with a freetrade price of £70. He also claimed he had not seen his business development manager since January.

Meanwhile, Inez Ward, who won a court battle with Enterprise earlier this year to stay in her Newquay pub Mavericks, feels the pubco model is not being run properly. "If it was operated correctly it could be beneficial to all parties," she said. "But at the moment the rents are unsustainable."

Punch licensees also have mixed feelings about their tie deals.

Steve Chard, licensee at the Travellers Rest in Bristol, even buys products he is not tied to from Punch. He said: "Without the tie the rents would go up.

"If we searched for our own products we could probably buy cheaper but if the rent goes up that is a fixed cost. There are benefits with Punch as well - they have done all of my menus for me, which is a big cost."

But Robin Tilbrook, licensee at Punch pub the Old Oak Inn in Hoghton, Lancashire, described it as "totally unjust". He said: "I feel that if the tie was lifted or even part lifted it would allow licensees the opportunity to support some of the very good small microbrewers that have some excellent wares to sell at very competitive prices."

And Tracy Jenkins-Bird, licensee at the Newman Arms in Central London, said: "Punch does not realise all pubs are different. Year on year my beer sales have increased 12 per cent for the past three years. You get no thanks for this, just increased prices, and a slating because you do not show football or have gaming machines."

And Andy Brooks, a Greene King tenant at the Laughing Fish in Uckfield, East Sussex, is keen for the tie to be investigated.

However, he acknowledged the pubcos offer cheap entry into the market and support to licensees. "The support we have had from Greene King over the past seven years has been very good indeed," he said.

But he added: "What I find concerning is the huge gap between what we pay for our drinks and how much they are on the open market."

View from a freetrader

John Cullen, licensee and freeholder of the Beacon in Tunbridge Wells, Kent, sympathises with tied tenants despite admitting they are his competition.

"It's incredibly unfair what they have to put up with in terms of high rents and high beer prices, it's a real double whammy," he said.

"But they do get support from their landlords and the selection of drinks they have now is incredible."

However, one issue John has is with tenancies that advertise themselves as freehouses. "I see a lot of this and while I don't think there's anything legally wrong, it's misleading for the customer," he said.

Yet as an independent freetrader, John is happy to be running his own show. He adds: "As a freeholder you get the full benefit of what you have built up in your business."

What next for the tie?

Licensees who loathe the beer tie will be keen to follow the upcoming review of the Trade & Industry Select Committee (TISC) inquiry into pubcos.

And while the original inquiry did not make recommendations on any changes to the tie the issue is still likely to be raised in the sessions.

As one analyst recently told The Publican, "closed pubs are now big news" so the 11 MPs on the panel, expected to hear evidence in Westminster in November, will be keen to look at all factors affecting the market - the beer tie included.

And while the tie will be one area examined, the committee will also want to quiz bosses on the effect the Licensing Act 2003 has had on competition in the market; the extent to which revisions to the codes of practice met the committee's concerns and whether there is a need for further regulation.

It's bound to be lively and could have a major impact on the industry.