MPs to vote on scrapping ‘unfair’ pub law

The UK pub industry could be set for massive reform this week, as MPs will vote on ending the obligation of pubs to buy beer from their owners.

The ‘beer tie’ vote could see the end of pubs being forced to buy beer from their owners (Photo: Wiki)

The current ‘beer tie’ arrangement means pub landlords are ordered by law to buy beer from the company – either brewery or ‘pubco’ – that owns their establishment.

This, it is argued, stifles competition and drives up beer prices even further – a major factor in the increasing number of pub closures in the UK in recent years.

Coupled with the fact that rent also has to be paid to these companies, opponents to the arrangement say that publicans are in an unfair position and are less able to make savings.

If passed on Tuesday, a cross-party amendment to the Small Business Bill will allow landlords to purchase beer on the open market and give them the ability to negotiate rents.

Liberal Democrat MP Greg Mulholland, who tabled the amendment, is quoted in the Daily Express saying, “Pubco publicans have been treated badly and charged unfair and unrealistic rents and ­rip-off prices for beer. It is time to resolve this issue.”

The amendment proposes that landlords be offered a “market rent only” option, removing the obligation to buy beer from the owning company and only being contracted to pay rent at a market rate.

The campaign, led by Fair Deal For Your Local, stresses that pub companies with fewer than 500 pubs would be exempt from these proposals, but its supporters are pushing for a separate voluntary code for these companies.

Around a third of pubs in the UK are owned by large pub companies – property companies who lease pubs out to tenants to run as their own business – according to the campaign group.

The latest Campaign for Real Ale figures show the rate of pub closures in the UK stands at 31 per week, having risen from 26 in March 2013, and 28 as of December 2013.