MPs call for major reform of beer tie

MPs argued today that a major reform of the beer tie is needed to help British pubs survive.

Lib Dem MP for Southport Dr John Pugh, who led the debate at Parliament, said the model is "near suicidal in a commercial sense" and urged pubcos to work closer with their tenants to make it viable.

Pointing to "extortionate wholesale prices" charged by debt-heavy pubcos Pugh said the model was unsustainable.

"As an economic model if you look at it quite dispassionately, unless you live in a time of buoyant increased leisure spending, it's unsustainable."

He added: "I think this analysis is now shared by hard-headed men of finance who see the current model as near suicidal in a commercial sense."

He also urged the government to "take action through some kind of new regulation" to tackle the issue and for pubcos to work more closely with licensees.

Fellow Lib Dem, and chairman of the All Party Parliamentary Save the Pub Group Greg Mulholland used the debate as an opportunity to lay blame for pub closures at the hands of the pub companies.

He pointed to "outrageous" contracts between landlords and licensees and "grossly excessive" prices charged for tied products.

He also accused pubcos of "abusing their tenants".

He added: "Quite simply the model has become skewed and that is factored in and quite simply I'm afraid that is closing pubs so we absolutely do need reform."

Mulholland also indicated he would be in favour of lessees being able to "opt out" of tie agreements with landlords after three years of a partnership.

However John Grogan, chairman of the All Party Parliamentary Beer Group, said he did not think the tie should be outlawed.

He argued that it helps family brewers and that pubcos have used it to ensure beers from microbrewers are more widely available.

He added that evidence suggests the rate of pub closures is as great if not greater in freehouse and managed businesses and that the tie is not the only issue impacting on businesses.