Over the past couple of months there have been a number of articles in the news discussing the demise of the traditional English pub, and how hundreds have had to shut down recently due to the fact that their landlords are ‘squeezing them out’. Most of the time, when a tenant begins renting from a pub landlord in the UK, they also enter into a deal which means they can only buy their supplies exclusively from said landlord, which according to reports is leading to unfair practices by landlords.
At the same time as local pubs closing down, there has also been a massive increase in ‘pub-cos’ such as Yates and Weatherspoons that can offer cheap drinks due to the fact that they are owned by a large brewery. These pub-cos are being accused of abusing the system and charging high amounts for rent and supplies to other tenants in order to push competition out of the sector. Now, the Secretary of State for Business, Innovation and Skills Vince Cable is looking into ways to introduce stricter regulations on large pub-cos in order to save smaller pubs and stop them from abusing the system.
Mr Cable said: “Although some pub companies behave well, the evidence I have received makes it clear that in too many cases tenants are being exploited and squeezed, through a combination of unfair practices, lack of transparency and a focus on short-termism at the expense of the long-term sustainability of the sector. [Landlord groups’] behaviour, especially alongside the many other challenges facing the sector, risks damaging the British pub industry, which not only consists of small businesses employing hundreds of thousands of people across the country but also contributes substantially to community spirit and cohesion.”
It has already been estimated that around eighteen pubs close in Britain per week, which is why Mr Cable is hoping to save pub tenants £100 million per year by changing the laws concerning exclusivity of supply form their landlords. He is proposing that the so called ‘beer-tie’ should be changed so that pub tenants can have more of a choice as to who they get their supplies from, however pub landlords have already criticised the plan with many claiming that the beer-tie actually benefits tenants as it offers them lower rent and start-up costs. It will be interesting to see how this will change the face of the pub industry in the UK, and how landlord insurance companies will react if the ‘beer-tie’ is no longer allowed.