Tied pubs provide good opportunities

It was fascinating to read that Martin Horwood, Lib Dem MP, has introduced a Bill in Parliament making it compulsory that tied pubs are offered a free-of-tie option as well as an open-market rent review.

It's also quite scary that 11-plus MPs have jumped on the bandwagon, with probably no idea whatsoever of how the tied house system works.

We can debate the open-market rent option another time as I really want to reiterate to all those MPs and others that the tie has been investigated on more than 25 — yes, that's 25 — different occasions over the past 30 years.

So, let's accept for the moment that the tie works — what other industry offers an opportunity to operate, as a self-employed entrepreneur, a pub/bar with a freehold valuation often in excess of £400k, with an ingoing cost of £20k-£30k and potential to deliver a 100% return on your investment?

Now, before those licensees who are not making £20k-£30k start blogging and moaning, ask yourself why not? It won't be because you don't have a free-of-tie option; it's probably because your pub offer is both out of date and you offer no real reason to visit! The real facts, Mr Horwood, are that there are at least 10,000 too many pubs in the UK and there is simply not the demand or frequency of pub visits any more.

I accept that the supermarkets are hugely attractive and great value, as well as offering a range of beers and wines that the on-trade cannot compete with. However, the frequency of pub visits has dropped significantly over the past 10 to 15 years, probably never to return.

Therefore, we should encourage all those MPs and local authorities to allow these pubs to close and be de-licensed, and then support those pubs that remain. Of course, a simple option to obtain a free-of-tie supply is to purchase your own freehouse, however, it is clear from submissions presented to the BISC that a tied agreement is the most cost-effective option to enter the leased & tenanted sector and can offer a better return than if you purchased a freehold — that's a fact!

On a lighter note, I was discussing with a licensee last week proposals to support Comic Relief and Red Nose Day on 18 March, and how this offers a great opportunity to involve your existing and potentially new customers. An hour later, plans were in place to have a Red Nose week, from 14-21 March.

Customers have now offered help and a budget of £250 has been set. Get involved, it could be the catalyst you need to relaunch your pub.