Tied pubs: the 'saviours of cask ale'

The tie has been the saviour of cask ale. But now's the time to follow Everards' lead in flexing it, argues Society of Independent Brewers (SIBA) president and Everards tenant Keith Bott.

The benefits of a tied estate to my business have been spectacular — guaranteed outlets, sticking to the ethos of our company, promoting beer and our brands have given us a great foundation for the business.

Where we go from here depends how things pan out. We would love to increase the number of outlets we have, the market is ripe for acquisition whether freehold or tenancy. But if we are going to invest we need to be sure of the marketplace; the uncertainty caused by potential political intervention continues to give me cause for concern.

Stability is essential if we are going to see a resurgence in pub ownership and operation. The tied house has long been the saviour of beer and, in particular, cask ale. Would we have had the opportunity to reintroduce local beers without the regional brewers who stuck by cask ale when the market moved to lager? No, we wouldn't. So the tie is responsible for the choice we have now.

And yet, in a simplistic world, the suggestion is that the end of the tie would improve choice — of this I am not convinced. This has been the overriding principle behind SIBA's position on the tie, a pragmatic belief in a level playing field.

This means the opportunity for products to compete, while those companies that have invested, or continue to invest in their brands and property, should gain greater market share than those that sit by their empty mash tuns and moan.

SIBA has battled tirelessly for access to market since it was founded. In fact, our mission statement reads: "To campaign on behalf of independent brewers to ensure that they have the best possible opportunity to bring their goods to market" — and we believe that the tied house is an essential tool for brewers to bring their goods to market.

Those who continually challenge the tied-house model are, to my mind, ill-informed and failing to understand simple economics. In a completely free market I believe that we would face the annihilation of both regional and small brewers.

We would, as the Campaign for Real Ale (CAMRA) suggests, see a reduction in choice as the major brewers and wholesalers throw seemingly unending marketing budgets at cheap-to-produce, ubiquitous brands.

Choice spells quality and the right of the consumer to choose a finely-crafted product over PR budgets has begun to show through in industry figures. Larger brewers are seeing the quality argument, put forward by SIBA and small brewers, turn into hard facts as cask-ale sales grow and other beer sales fall. Some of those larger brewers, such as Miller Brands, recognise the same principles in their products and will join us in promoting the history, choice and quality arguments. Pilsner Urquell is my favourite lager and sits comfortably alongside the ales we brew.

Working together​

Working together is simply the right things to do. I have never joined with those who challenge the status quo, purely because they are wrong. In all my time campaigning for beer I have tried to find pragmatic solutions that give everybody benefit. I believe that beer has for too long been a market under-resourced and under-achieving.

We have a great story to tell; beer is less harmful to health than other stronger alcohols, it has a range of flavours to suit every taste and has huge benefits to offer local, regional and national economies.

If there is to be political intervention then why not look at where policies have helped to cause the downfall of the pub. The current duty system is broken. Without a doubt, it is ridiculous that the Treasury can't see the effects on consumption their policies are having.

Their long-held belief that we should move towards equivalence, where all alcohol is treated the same, has seen a freeze in spirit duties, which means you can buy a bottle of vodka for the price of three pints in the pub. On the other side of the coin, historic directives from the EU prevent fair treatment for beer where cider and wine are concerned. Both cider and wine have their duty charges irrespective of strength so they have naturally crept up in strength over a period of time. Currently you can buy your week's worth of units, should you choose to drink white cider, for under £6.

Equivalence would be a disaster. Spirits are far cheaper to produce and distribute than beer, and even the health lobby recognises that beer is less harmful. Cider and wine continue to hide behind EU directives written in 1992 and, while they should be reviewed every three years, this year's review will be the first. It is time to make the case for beer. We need the same systems while rates should be based on each EU member state's requirements.

Lower-strength products should be taxed less than more harmful, stronger products and a member state should be able to charge a lower rate of duty for lower-strength products within a category. We also believe that we should be able to promote products being consumed in regulated environments; this could be easily achieved by offering a lower rate of duty for draught products — those sold in the pub.

Market forces​

The market could then dictate fair prices and supermarkets coming under pressure for loss leading would be forced to charge more sensible prices. This would help to alleviate the need for minimum pricing, which, while solving the immediate problem, could come back and bite us if the health lobby were to gain any more power.

I am pleased to say that all groups within the beer industry are working together to convince the Treasury that it is time for a fair deal for beer and to convince the EU that the directives require some change.

Beer is at the very heart of the pub and is the point of difference the pub offers over drinking at home. The microbrewing revolution has led to a resurgence of interest in beer, and it is now time to lead the way in helping retailers to take advantage of that growth and to start taking market share from other drinks. The best way to do this is by redefining the role of the pub in society. No longer should we expect licensees to work long hours for next to nothing.

We should celebrate our great pubs and those who run them. I also think the pubcos are right when they say many hosts are not up to the job, though it could be argued that it is their greed that has forced many good licensees out of the trade.

If we are to convince the public to return to the pub we have to offer them a great experience, and to do that we have to give licensees the tools to do it. One of these is a great range of locally-produced beers, but, more importantly, we have to offer licensees the chance to make a good living from their hard work.

Everards' flexible tie in action​

So what is the pragmatic solution to resolve the plight of the licensee?

During the recent mediation process on pub tenancies, Julian Grocock (SIBA chief executive) and I had time to sit and reflect on the tie and its effect on pubs and licensees.

We came up with what we think would be a fair and equitable solution, which Julian christened the "Easypub". We believe that the current situation disadvantages beer. Any decent operator buying their beers at full wholesale price while buying everything else free of tie is bound to promote those products they can buy cheaper.

We need a system that allows hosts to choose to be free of tie on products they wish to promote. Within the Everards agreement, it has recognised the passion and commitment brewers like Titanic have for their own product. They gave me freedom to sell whatever cask ales I choose in the pubs I lease from them, while tying me on keg beers, packaged beers and cider. This allows me to concentrate on the area of business important to me while paying a lower level of rent than if I were completely free of tie.

Clever and innovative deals like this will continue to be offered; many are considering similar de