Financial struggle for ‘tied’ publicans

“Beer tie” publicans have to pay 40-45 per cent more for their beer than independent pubs, a study by the IPPR think tank showed.

Around half of all pubs in the UK are “tied” to companies, with tenants having to buy virtually all their drinks from them.

The report said that tied publicans are more likely to be struggling financially, earning less than other people running pubs.

A survey of 550 publicans showed that 57 per cent of those in tied pubs said they were struggling financially compared with 43 per cent of others, while almost half earned less than £15,000.

Almost two out of five tied publicans believe they will no longer be managing their current pub in the next three years.

Rick Muir, IPPR’s associate director, said: “Thousands of publicans across Britain are being put under significant financial pressure by the beer tie. Our survey of publicans shows they have suffered worse through the recession.

“The beer tie limits the commercial freedom of tied publicans, who are forced to pay more for their beer than non-tied operators. A recent select committee report shows that the higher prices tied publicans have to pay for their beer are not adequately compensated for by lower rents.

“It estimated that because of the discounts they can access, non-tied operators will make more money from their businesses.

“The Government should act to reform the way the industry operates and give publicans greater freedom from the big pub companies.”

The British Beer and Pub Association said last week that alcohol taxes in the UK were now among the highest in Europe, threatening jobs and leading to less alcohol being drunk.