Mark Daniels: All tied up

Related tags Fair pint campaign Beer

I understood the position I was in, I knew I could only buy from my brewer, and I understood I was going to get screwed on my prices compared to...

I understood the position I was in, I knew I could only buy from my brewer, and I understood I was going to get screwed on my prices compared to being able to buy from wherever I liked.

I also understood, thanks to years in the corporate market place, how big businesses think. At the end of the day, it's their shareholders who are important, not their customers, and so the bottom line counts.

You'd think, then, that I'd be in support of the Fair Pint campaign - and I am, within reason.

Tied tenants and leaseholders pay a harsh premium on their beer because the brewery can charge them that; it's one way the breweries can make up the difference in the prices they're having to give away to such dominant customers like the supermarkets.

Then there are the rent charges, the insurances, the maintenance contracts and all the other fiscal sundries that envelope the Publican contractually obliged to a tie.

Add to that the alcohol duty, rising utility bills, escalating transport costs and some bloke in sandals selling us energy efficient light bulbs for the price of a small dog and it's no wonder that many publicans are struggling to stay afloat.

I suspect that there are many pubs out there managing to keep themselves going, but only by doing the same thing that my wife and I do - and that is to simply not take a wage from our business.

It puts us in a difficult position, but at least the pub's still open.

At the end of the day, a 'tie' between publican and brewery is little different to the purchase of a branded franchise.

If, rather than running a pub, you were to purchase the franchise of an ATS Mobile Tyre Fitting Service, you'd hand over your cash and in return receive a bright yellow van, some tyre fitting equipment, a giant puncture repair kit - and a price list of premium and lesser brand tyres that you could sell to your customers.

It's understandable, then, that ATS would be a bit miffed if you went and bought your stock from Kwik Fit in the same way that Ronald McDonald would be a bit tearful at a franchisee for selling a Double Whopper with Cheese.

It undermines the franchise's brand and sends out the wrong message to their customers.

So you can't expect Adnams to be overly happy about their tenants selling Greene King, and vice versa.

The issue should not, therefore, be about whether pubcos should release the ties on their buildings, but to get them to recognise the value of their tenants and leaseholders.

Apart from being guaranteed income, many of us are the front line for their brand and, as tied occupants, we have to make their brand appear quite expensive in order for us to make ends meet.

It's disheartening to read through other trade suppliers' price lists and discover firkins of beer from a brewery we might be tied to being sold to our competition in the free trade for a dramatically lower price.

If the mighty pubcos and breweries that dominate the on-trade industry were to allow their ties a more competitive buy price for the product it would dramatically alter the face of the industry. And it could be compensated for quite easily by increasing the buy prices of certain members of the off-trade.

It would allow tied publicans to breathe a little easier, it would relinquish the burden of an overdraft, it might even allow the price of a pint to go down, for a change, which would encourage people to use the pubs more and would provide an even better social platform to encourage responsible drinking, reduce binge drinking and combat underage purchasing. All under the banner of a responsible, socially aware brewery.

But even if this were to happen, Alistair Darling should be aware that this still doesn't absolve him for his part in damaging the pub trade during a difficult time.

Related topics Property law

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