BBPA fears closures from beer-tie vote

Ahead of a vote by MPs today, the British Beer & Pub Association has claimed the debated ‘beer-tie’ arrangement is positive as it is slowing the closure of British pubs.

MPs will today vote on the law that could see an end to the ‘beer-tie’ obligation between landlords and pub-owners (Photo: Flickr)

Figures obtained by the association of pub owners claim to show a slowing of pub closures owned by its members – pubs that are leased to landlords who then pay for rent as well as beer supply to these owners.

The survey of the association members, which was carried out by Oxford Economics, is said to show a slowing of the closure of leased pubs, with an average of five closing per week over the last year to September, according to the BBPA.

This corresponds with Valuation Office Agency figures that show the number of pubs deregistering in England and Wales stood at 13 per week in the year to September, suggesting that three more independent pubs close per week than leased pubs.

However, the full report has not yet been released by the BBPA, and a similar survey dedicated to the independent sector has not been carried out.

The scrapping of the controversial ‘beer-tie’, that forces pub landlords to buy their beer stock from their owning pub company or brewery, is being voted on today by MPs as an amendment to the Small Business, Enterprise and Employment Bill.

In a statement released by the BBPA, these figures are said to “show that statutory intervention that would damage the pub trade and risk a return to far higher closure rates is not needed.”

Brigid Simmonds, chief executive of the BBPA, said, “These figures reflect the increasing confidence we are now seeing in the pub sector, very much supported by government action on beer duty, business rates and other measures introduced.

“However, we are now facing very important legislation which could affect Britain’s pubs for decades to come, and it is vital this recovery is not put at risk.”

But supporters of the reform – who are confident of success – view the double-charge of rent plus beer stocks, the susceptibility to face unfair rates with these charges, and the inflexibility in being unable to cut costs by sourcing cheaper beer on the open market are big factors in pub closures.

If passed, the amendment would make a “market-rate-only” option available to pub landlords who come under ownership of pub companies, meaning they would only pay the market-rate rent and not be obliged to by beer stocks from their owners.