Tied pub model is 'less risky'

The tied pub model is "less risky" than the alternatives, according to multiple operator Matt Saunders of the 11-strong Derby-based Fat Cat group.

Saunders defended the tied model in a BBC Radio Five Live​ debate on pub closures yesterday.

Saunders, whose company and sister company Moleface Pub Company has several Punch and Enterprise leased sites along with free of tie venues, added that he felt both systems worked.

But he said the tied model was a "less risky system" given it operated like a step rental model, with a lower base rent, which was topped up by way of the beer tie. 

Defending the tie​

British Beer & Pub Association chief executive Brigid Simmonds clashed with Paul Maloney of the GMB trade union, who claimed tied tenants were at a distinct disadvantage.

Simmonds denied that tied pub tenants are financially worse off than free of tie tenants in a live radio debate.

She added that tied pubs were a great way for entrepreneurs to get into business.

Maloney said pub customers were paying 80 pence more per pint then they should, in order to service pubco debt.

Simmonds admitted that the tied system needed to be more transparent, adding that steps had been taken to improve this — such as the Royal Institution of Chartered Surveyors' new code of practice on rents would help.

Monkey tricks​

But Maloney accused pubcos of "monkey tricks", and said pub closure rates stood closer to 60 pubs a week if business failures in the tenanted sector were taken account of.

One tied licensee, who preferred to remain anonymous, told listeners he regularly bought beer out of tie on busy football match days.

He said beer was one third cheaper from other sources, allowing him to make a profit. He also said he had bought wine direct from France for £2 per bottle and sold it on to customers for £8 as "bin ends".

"We don't get help from breweries, so we took the initiative (to buy out of tie) and undercut the breweries, and I'm not ashamed of it," he said.