Around a third of pubs in the UK are owned by Pub Companies – large property companies who lease pubs out to tenants to run as their own business. These pubs are contractually obliged to buy their beer only from the Pubco; preventing pub licensees buying on the open market. This is known as the beer tie.
Why is this the case? The Pubco model.
Pubcos make excess profits by using the beer tie to force licensees and ultimately the consumer to pay high prices. Licensees can pay up to 50% more for beer than a free-of-tie publican. Alongside this pubco licensees often find themselves paying above market value rents and have no independent adjudicator to settle disputes.
CAMRA has been campaigning for reform of the large pub companies for ten years.