News

The end for the Beer Tie System?

Chloe Buxton, Trainee Solicitor in Astle Paterson’s Commercial Department, comments on the recent news that the Government was defeated in a vote on the control that owners of pubs can exercise over the pub landlords.

Chloe said that “Following an increase in competition from supermarkets, a rise in taxes and a ban on smoking indoors, British pubs are closing at the rate of 31 per week.

A victory for British publicans comes in the form of the proposed amendment to the Small Business Enterprise and Employment Bill, whilst being a defeat for the larger pub companies who believe their use of a 400 year old system is one which creates jobs and keeps the pub industry going.

The Beer Tie System means that pub landlords are contractually committed to exclusively buying beer from the brewery or company that owns the public house, often at inflated prices.  However, the larger pub companies say that such an agreement is justified by them charging a lower market rent to the pub landlord.

Should the amendment pass with the bill in the House of Lords then pub landlords, 25% of whom admit to working over 80 hours a week, would garner the rewards by being able to freely negotiate prices for themselves and their punters on the open market.

The proposed version of the Act would mean that any pay disputes would be referred to an independent Adjudicator – pub landlords would have the right to request a rent review after 5 years and it is thought they could save up to 60p on every pint.”

Chloe continued “British publicans may be intoxicated with the result, however, as 284 MP’s voted in favour of the amendment and 259 voted against, the sobering reality is that such a slim margin will leave even the most politically astute wondering which way the House of Lords will ultimately vote.”

Should you be entering into a lease for a pub then please contact our Commercial Department on 01283 531366 or by way of email to jpaterson@astlepaterson.co.uk to discuss matters further.   

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