Pubco pubs closing fastest

By Ewan Turney

- Last updated on GMT

Related tags Beer

Closed: tied pubs are struggling, says Good Beer Guide
Closed: tied pubs are struggling, says Good Beer Guide
Nine tied pubco pubs close every week, compared to five free-of-tie pubs — that’s the bleak picture painted by the Campaign for Real Ale’s Good Beer Guide.

The Guide reports that two pubs are closing every day and claims that the number of tied pubs has fallen by 3,216 since December 2008 because “large pub companies have failed to support their licensees through tough times”.

The number of free of tie pubs in that period increased by 425, according to the figures compiled by CGA. CAMRA said free market reforms are required to secure the future of small tied pubs. It is calling for all licensees to be given a free of tie option, accompanied by an open market rent review while publicans who choose to stay tied should be given a guest ale right.

“These figures show a spiralling decline in the tied pub sector, brought about by big pubcos squeezing their licensees with high beer prices and creating an environment where many publicans are unable to invest in their businesses,” said Guide editor Roger Protz.

“While many tied publicans struggle in the face of high rents and excessive beer prices, free of tie owners are faring better in the current climate with the ability to offer greater beer choice, lower prices and a better pub environment to the consumer.

“Free of tie pubs, managed pubs and tied pubs run on a more sustainable basis by the family brewers are much more likely to survive and continue serving communities long into the future. Such successful businesses take pride of place in the Good Beer Guide 2012 and serve as models for the future in helping to preserve Britain’s iconic beer and pub industry.”

No greater problem

However, British Beer and Pub Association chief executive Brigid Simmonds said: "Pub closures are no greater a problem in the tenanted sector than elsewhere.

"All types of pubs are facing very high taxes, with beer tax up 35 per cent since March 2008, and too much red tape. Thousands of pubs have been sold by pub companies, from the tenanted into the free trade, since 2008 — which has boosted the net number of free trade pubs and is clearly coming through in these figures.

"It is not valid to compare free trade prices with those in the tenanted sector, as the tied pub model means higher beer prices for lower pub rents."

It pointed the Office of Fair Trading's rejection of CAMRA's super-complaint. The OFT said that "consumers benefit from considerable competition and choice between pubs and that this competition prevents the beer tie from being used to inflate pub beer prices beyond competitive levels".

The OFT report also said: “The OFT also concluded that the beer tie has not prevented tied pubs from offering a wide choice of beers to consumers, having found that pub-owning companies generally source beer from a considerable range of suppliers, including smaller brewers.”

Simmonds added: "Pub companies have introduced new voluntary codes of practice on their tied agreements, and it is not accurate to suggest that pub companies have failed to support licensees through tough times.

"They have provided £265 million of support to pubs in 2010. A recent survey by CGA also showed that 89% of new entrants are aware of the advice and business support now available and 83% of these have taken advantage of it."

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