Head of Steam boss complains of tie 'strangulation'

A multiple operator has described the beer tie as a "strangulation" that has the licensee "at its mercy".

Tony Brookes, managing director of the Head of Steam chain, made the comment in a submission to the Office of Fair Trading (OFT) in support of CAMRA's 'super complaint' about the beer tie.

Brookes supports CAMRA's stance that the beer tie has a detrimental impact on consumers.

In the submission, he compares the difficulties of running the venue LYH which is leased from Heineken UK on a full tie compared to his other eight free of tie venues in the north of England

He states: "We knew at the time that it was a difficult lease, but we believed we could turn the pub around to profitability by our market development skills (all our other pubs are successful). But to date we have been proved wrong.

"The pub can only offer the very restrictive range of products on Heineken's UK price list, which comes nowhere near meeting the desires and demands of modern pub customers."

He goes on to describe the difference he can buy beer as a freehouse compared to a tied outlet as "startling".

"If our pricing structure at LYH is typical of prices paid by tied operators everywhere, free-of-tie operators are getting a massively better deal than tied pubs."

In its super complaint CAMRA claims that consumers are worse off because tied licensees pay up to 50p more per pint than their free-of-tie competitors.

Brookes agreed: "The situation as to consumer price advantage is that the consumer is penalised by drinking in tied pubs, which will always be more expensive than free-of-tie pubs.

"Tied operators are in a hugely disadvantaged position on cost prices."

Last month the OFT agreed to re-open its inquiry into the beer tie after CAMRA started legal proceedings. It originally ruled that there was no case to answer.

It is accepting submissions from interested parties up until 5pm this Wednesday (March 24).