For a very long time, many pubs in London have been tied houses. This means that the tenant of the pub is required to purchase their beer from the lessor. Normally this is where the brewery owns the pub and the landlord is required to sell that breweries beer and also purchase spirits from them too. However, a recent announcement by the Government may see the demise of this practice.
It is the beer tie that some say has led to the demise of the British pub due to the higher costs passed on to the pub making them unprofitable. The Government announced plans for a new code of practice and a “powerful” adjudicator to help out struggling pubs. However, the code would only apply mandatory rules for companies owning more than 500 pubs. It is said that the move will stop abuses of the beer tie as the adjudicator will have the power to enforce the code and deal with disputes through sanctions and fines.
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Quoting Business Secretary, Vince Cable:
“We gave pub companies every chance to get their house in order, but despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn’t working. Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship. Pubs play a valuable role at the heart of our communities and we urgently need a change to help them survive and become profitable. These plans will do just that and could save pub tenants £100 million per year by making sure that pub companies charge their tenants fair rents and beer prices”.
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Under the new proposals, tied pubs would be allowed to source beer from other producers, which will help the growth of small beer and ale across the Country. Vince also pointed out that the Government was supportive of a thriving pub sector, as it represents a large number of small businesses employing hundreds of thousands of people.
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It is good to hear that the Government is taking our British pub tradition seriously and making sure our landlords can make a decent living. It has been said that under the beer tie system some pubs made as little as £15,000 a year. This is not a lot of money for someone to work excessively long hours 7 days a week.
The new code may see our local pubs being able to serve more guest beers from some of the newer smaller breweries giving us, the punter, more choice and even cheaper beer. Now that’s worth drinking to!
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