Mark Daniels: The Beer Mitten

Related tags Tie Franchising

I often wonder if the furore we hear daily over the state of the pub industry and, most specifically, the Beer Tie would be lessened if the industry...

I often wonder if the furore we hear daily over the state of the pub industry and, most specifically, the Beer Tie would be lessened if the industry had chosen to name this specific contract differently.

A quick search on Google for a definition of the word Tie results in such answers as to fasten or secure with a rope, string or cord. Or to create a bind. It even associates marriage with the word "tie".

Marriage? Kill me. Now.

The principle definition of being tied makes people feel as if they are locked in a pair of handcuffs. It makes them feel restricted, unable to move, locked in to their situation.

If the industry had chosen to define the Tie as a Franchise, things might have looked a whole lot rosier - despite the fact that the Google (which I'm using because my Oxford Concise English Dictionary is currently being used to stop my bathroom door from swinging all the way shut and then locking itself) definition of the word Franchise is an authorisation or contract to sell a specific company's goods or services in or from a particular place.

Um - the last time I looked at my contract, I think that's what it said too.

Yet unfortunately if we try to liken our contracts to franchises, we get upset, despite franchises allowing individuals to set up their own business for a much lower cost and without the need to spend the time and money on research, development or marketing. A bit like the Tie then.

There are, of course, differences and I appreciate that but, at the end of the day, if you buy into a franchise you will be locked in to a contract that forces you to buy your supplier's products from them at a specific price, and you won't be allowed to sell a competitor's product or buy from outside of your supply route.

Contracts that tie companies or individuals in to a specific product for a pre-determined price or period of time occur in industry all the time. And many businesses, small or large, are reliant on them for their incomes. You can see them in many walks of life.

Airlines are tied in to contracts as to which airports they can and can't land at, and they pay premium rates by the hour for having their aircraft on the ground where they shouldn't be. Chemical companies sell their products via franchisees who aren't allowed to sell or promote a competitive product. Distribution companies agree to exclusive contracts for the distribution rights to specific products, and pay handsomely for it. And the chances are that if you have an iPhone it's probably on the O2 mobile phone network because, until the end of 2009, the contract was exclusive to that network.

This is why smaller brewing companies such as Moorhouse rely on the Tie to maintain a supply through their public houses. Without the tie the chances are they wouldn't be able to compete and they would fall by the wayside, lost in the advances of the bigger companies, and that would be a shame.

The Tie is not perfect. The business practices employed by some companies appear despicable and the price differences charged between free-trade and tied are too wide in certain areas as to be granted as fair. I don't agree with all aspects of the Tie but I fear that by tying up all the court's time with arguments about abolishing it, which would be potentially disastrous for large parts of this industry and would not necessarily allow our customers to benefit from cheaper prices, other major issues facing this industry will simply go unheeded.

Such as supermarkets, and their rampage on cheap booze that is leading slowly to the death of social drinking. Or last week's introduction of the Mandatory Code, which was simply bullied through despite the trade not wanting it because so few people stood up and opposed it.

Perhaps, if the Tie had been written up as a Franchise in the first place, where people understood that it is a contract to sell a specific company's goods or services, individuals would feel less restricted by it, despite its covenants.

Or imagine if we'd named it the Beer Mitten, a lovely fluffy glove to keep us all warm and happy...

Related topics Property law

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£ 60,000 - Leasehold

Busy location on coastal main road Extensively renovated detached public house Five trade areas (100)  Sizeable refurbished 4-5 bedroom accommodation Newly created beer garden (125) Established and popular business...

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