Free-of-tie option would boost trade, claims Federation of Small Business survey

By Rob Willock

- Last updated on GMT

Related tags: Free-of-tie option, Small business, Public house

Pubs said it would mean a wider selection of beers
Pubs said it would mean a wider selection of beers
Licensees would invest more in their pubs, employ more staff and stock a wider selection of beers if they were offered a free-of-tie deal, according to a new survey.

Research from the Federation of Small Businesses (FSB) shows that 79% of tied tenants believe their pubco takes too much money out of their business.

And just over half (51%) believe that they would pay a lower rent in an open market.

Survey of 500 licensees

The survey of 500 licensees showed rent satisfaction levels varied between the six biggest tenanted pubcos — with Enterprise and Punch rents causing the greatest dissatisfaction (80%+) and Marston’s causing the least dissatisfaction (59%).

Nearly nine out of 10 respondents (88%) indicated that they would take a free-of-tie option with an independently assessed fair rent if it was offered by their pubco.

Majority would invest

And, of those, a significant majority said it would allow them to invest more in the fabric of their pubs (78%), their staff (75%) and their advertising and promotions (74%). Nearly two-thirds (62%) said it would encourage them to stock a wider range of beers.

John Allan, national chairman of the FSB, said: “The results speak for themselves. The big pubcos are as bad as each other and their tenants don’t feel they are getting a fair deal. They want to give their punters more choice as well as interesting craft beers.

“The statutory code can’t come soon enough. The six largest pubcos are able to control the relationships to their own advantage and are under pressure to reduce debt by increasing income from rent and selling off pubs.

“Considering current conditions, we believe that it is not possible for the large pub companies to operate credible voluntary regulation.”

Toby Perkins, Labour’s Shadow Pubs Minister

Perkins said:  "This survey demonstrates the urgent need for a mandatory free-of-tie option for landlords.  This would be a free market solution which would allow publicans to compete on a level playing field.

“Labour have been working closely with the FSB, CAMRA and other business organisations and unions to call for a free of tie option for some time.  We will be strongly pushing the government to include this option as part of their new statutory code for the pub trade.”

Related topics: Legislation

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