Pubco giants defend the tie

A pubco boss today warned even more pubs could close if the beer tie was to be removed.

Enterprise Inns chief executive Ted Tuppen and his Punch Taverns counterpart Giles Thorley were both giving evidence at the Business & Enterprise Committee (BEC) inquiry into pubco power.

Tuppen told MPs Enterprise is committed to the tie and that it benefits both pub companies and licensees.

He said: "We have a total interest in the performance of the pub. Were the tie to be removed we would be a straight-forward property company and we wouldn't see anything like the £9m of opportunity we gave to licensees in the last year."

He added: "If it were removed there would be even more pub closures."

Thorley went on to say that international brewers may squeeze licensees if they dealt directly with licensees in the absence of the tie.

"We would see a significant reduction in investment in pubs by pub companies because we would have no incentive. We would have no connection with the pub anymore.

"The benefit of wet rent, as some people have called it, is it gives an immediate indicator of the performance of the pub."

Tuppen went on to defend 'restrictive covenants' where some pubs are sold on the basis they no longer operate as pubs because they are unviable or because there is too much competition in the area.

He said Enterprise is currently selling around five or six pubs a week.

However he said that the company would not sell the "last pub in the village" and when they closed it was an "absolute tragedy."