End of ‘Beer Tie’ for U.K. Pubs
In a decision that has rattled the U.K. pub industry, U.K. lawmakers voted in November to end the 400-year-old “beer tie” rule that locked pubs rented from large pub groups or breweries into buying beer exclusively from them.
Almost half of Britain’s 50,000 pubs are “tied houses,” a deal in which the brewery or pub group offers lower rents, but charges higher than average for beer; tied houses paid up to 77 percent more for a keg of Foster’s and 67 percent more for a keg of San Miguel, according to research conducted by the Campaign for Real Ales (CAMRA) last year.
Allowing tied licensees to buy beer on the open market could mean cheaper pints for consumers, but pub groups warn that lower profits will lead to pub closures and job losses. Pub group shares plunged the day after the tie was voted down, with shares in the largest pub owner, Enterprise Inns, falling 17 percent.
The amendment passed in the House of Commons by 284 to 259 votes, but still has to be approved by the House of Lords before it can become a law.