Stonegate challenged over tied pricing, fees and repairs

Documents seen by The Morning Advertiser (MA), alongside current Stonegate Pub Partners listings, raise concerns across several areas: tied product pricing and margin pressure, full tie release fees exceeding annual rent at several current listings, and recurring maintenance charges amid operator claims of delayed repairs.

The concerns come after the Pubs Code Adjudicator’s (PCA) 2026 Annual Tied Tenant Survey showed Stonegate recorded the lowest satisfaction score of the six regulated pub companies, at 39%.

The wider survey also flagged price increases, slow repairs, poor communication, high turnover of business development managers, a lack of support and a lack of understanding of tenants’ issues as reasons for dissatisfaction.

On 15 July, the PCA launched a formal investigation into Stonegate over possible Pubs Code breaches, examining the pubco’s conduct between 15 July 2021 and 14 July 2026.

The investigation will look at whether Stonegate gave current and prospective tied tenants accurate and transparent information, including around pub condition, repair and maintenance works, financial forecasts, rent information and business development manager conduct.

The regulator stressed it has not yet reached any conclusions on whether Stonegate has breached the Pubs Code.

Against that backdrop, the material seen by the MA raises further questions about the cost and viability of some Stonegate Pub Partners agreements, including tied product prices, gross profit projections and full tie release fees.

Pub trade adviser Phil Dixon, who has reviewed the documents, said prospective applicants needed to study Stonegate agreements closely before signing, particularly where full tie release fees were set out alongside guide rent.

Pricing concerns

The MA has seen a recent Stonegate rent proposal for a pub in Worcestershire (dated 5 June 2026), based on Partnership Band I pricing.

The document forecast total income of £557,800 and a rent proposal of £46,500. It projected gross profit of 27.9% on packaged cider and 39.4% on wine.

Dixon said: “You cannot run a pub with 27.9% margin on packaged cider and 39.4% on wine. It is outrageous. Stonegate really do need to do something about this policy.”

He said the packaged cider margin was particularly difficult to justify in price sensitive areas.

He added: “The reason packaged cider shows under 28% GP is that at Stonegate’s Band I prices you have to charge £6.50 to almost £7 a bottle. That is definitely not an option in the Midlands.”

The MA has also seen the drinks supply terms document for the same pub. It is on Partnership Band I, effective 5 June 2026, with all figures excluding VAT.

Examples from that document include Tanqueray Gin 70cl at £44.03, Jack Daniel’s 70cl at £37, Bacardi Carta Blanca 70cl at £29.44, Courvoisier 70cl at £44.87, Bells 70cl at £30.03 and Smirnoff Red 70cl at £24.71.

Dixon said comparison prices obtained from a Midlands stocktaker showed Greene King pricing of £15.49 for Tanqueray, £24.26 for Jack Daniel’s, £20.66 for Bacardi Carta Blanca, £26.94 for Courvoisier, £17.64 for Bells and £14.98 for Smirnoff Red.

He said prices from Marston’s included £23.14 for Jack Daniel’s, £18.67 for Bacardi Carta Blanca, £17.17 for Bells and £15.65 for Smirnoff Red. He added the figures had been obtained from the stocktaker, but he did not know whether any of the comparison prices were subject to special terms.

Separately, the Worcestershire rent proposal lists weekly tie release fees of £5.96 for flavoured alcoholic beverages, £110.77 for wines, £103.85 for spirits, £79.81 for minerals and £47.31 for one SIBA cask brand.

Total weekly category tie release fees came to £347.69, while the full tie release fee was listed at £658.65 per week, excluding VAT. That means the full tie release fee would be more than £34,000 a year.

Live listings

Several current Stonegate Pub Partners listings reviewed by the MA on 1 July 2026 showed annual full tie release fees higher than annual guide rent, raising questions over the potential cost and viability of moving fully free of tie.

Dixon said he knew many of the Midlands sites listed and believed some of the forecast turnover levels were “optimistic”.

At Old Chapel Inn, Smethwick, the listing showed forecast turnover of £243,659, annual rent of £15,000 and an annual full tie release fee of £50,000. Combined, rent and full tie release fees would total £65,000, around 26.7% of forecast turnover.

At Vine Inn, Halesowen, the listing showed forecast turnover of £310,472, annual rent of £22,000 and an annual full tie release fee of £35,250. Combined, rent and full tie release fees would total £57,250, around 18.4% of forecast turnover.

At Tap & Spile, Birmingham, the listing showed forecast turnover of £1,024,707, annual rent of £63,000 and an annual full tie release fee of £76,000. Combined, rent and full tie release fees would total £139,000, around 13.6% of forecast turnover.

At The Tiger, Walsall, the listing showed forecast turnover of £395,783, annual rent of £20,000 and an annual full tie release fee of £32,000. Combined, rent and full tie release fees would total £52,000, around 13.1% of forecast turnover.

At Railway Inn, Walsall, the listing showed forecast turnover of £394,237, annual rent of £19,000 and an annual full tie release fee of £24,250. Combined, rent and full tie release fees would total £43,250, around 11% of forecast turnover.

In these listings, the full tie release fees were significantly higher than rent, with Old Chapel Inn the clearest example at £50,000 against annual rent of £15,000, more than three times the rent.

Dixon said: “The full tie release fees are everything, beer, cider, flavoured alcoholic beverages, wine, spirits and minerals. The fee is an annual figure.”

Dixon added Stonegate’s tie release fees were “massively different” to those he had seen from other pub companies, and said he understood from discussions with other pub companies that free-of-tie fees could be minimal, or in some cases not charged, where both sides wanted the relationship to continue.

Other operators spoken to by the MA also raised concerns about Stonegate’s tied buying costs and tie release fees, including operators with experience of more than one pub company model.

The MA has also seen correspondence sent to Stonegate in March, which set out earlier figures listed for The Bell Inn, Kingswinford.

Dixon said he had sent Stonegate an analysis of the earlier Bell Inn figures and asked it to double-check the terms.

The correspondence stated that the Stonegate Pub Partners listing showed annual rent of £37,000 and a potential full tie release fee of £45,500.

That would have meant rent and full tie release fees of £82,500 on forecast turnover of £372,889, amounting to around 22% of forecast turnover before other costs.

The current Stonegate listing for the same pub, reviewed by the MA on 1 July 2026, showed forecast turnover of £348,887, annual rent of £20,000 and a potential full tie release fee of £23,750.

Combined, the current rent and full tie release fee would total £43,750, around 12.5% of forecast turnover. The change represents a reduction of £38,750 in combined annual rent and full tie release fees compared with the figures set out in the March correspondence.

Dixon questioned how the earlier figures had been calculated, given the size of the difference between the March correspondence and the current listing.

The current figures are lower than those set out in March, but the change raises questions about how figures are checked before listings are published for prospective tenants.

Operator evidence

A multi-site Stonegate operator with four pubs told the MA he had seen similar issues across more than one site, supporting the issues raised by Dixon. He also runs a separate business that gives him regular contact with pub operators, including Stonegate tenants.

He said he had seen similar pricing, fees and repair concerns “all over” Stonegate.

On pricing, he said he could buy a 1.5 litre vodka for one of his free houses from a cash and carry for £25 excluding VAT. He said Stonegate was charging £48.88 excluding VAT for Smirnoff Red 1.5L at one of his sites, compared with £32.27 excluding VAT for the same product through Star Pubs & Bars.

Another operator with experience of several Stonegate sites raised concerns about tied beer prices, buying costs, fixed term tenancies and long-term viability. He told the MA one site would be materially better off once free of tie.

London-based multiple operator Tim Skinner said there was no longer a standard commercial model across the leased and tenanted sector, with agreements increasingly shaped by the quality of the operator, the strength of the business plan and the willingness of both parties to work collaboratively.

He said that, in one recent Stonegate fixed term tenancy negotiation, the site remained tied on beer but tie release fees quoted for wines, spirits and minerals were removed, alongside a small landlord contribution.

Skinner said a separate five-year Star tenancy was tied on beer but free of tie on wines, spirits and minerals with no buy-out, alongside landlord investment.

He said: “Forecasts are only ever the starting point. The detail behind labour, gross profit, utilities and the cumulative impact of rising costs is what determines whether a pub can genuinely succeed.”

Similar concerns have also surfaced publicly. In a social media post seen by the MA, the operators of the Dickleburgh Crown said they had terminated their tenancy with Stonegate after failing to agree terms for a five-year fixed tenancy.

The post said the rent being sought was “absurd” and claimed the operators had been told beer prices would need to rise to between £6.50 and £7 a pint to afford the rent. The operators said they were not prepared to increase prices to that level and had “walked away”.

The issue of spirits pricing has also been raised previously.

In a previous MA opinion piece, a former Ye Olde Foundry publican in Dudley said he was being charged £64 for a bottle of spirits that he could buy for £19 at a supermarket.

Repairs and maintenance

Operators also raised concerns about repair processes and recurring maintenance charges.

The multi-site Stonegate operator who supplied invoices said there were separate rent lines for cellar cooling and boiler maintenance, but claimed getting Stonegate to act could be difficult.

He said: “Cellar cooling is a big, big issue. At one of our sites it took six weeks before anybody did anything about it. We had to raise multiple tickets for them to come out. They eventually came out last week and fixed it.”

The operator also said he had been charged £750 to put concrete at the bottom of a cellar drop, despite arguing the damage had been caused by deliveries, and said another site had windows needing replacement for three years.

Separately, another multi-site operator told the MA cellar cooling had been out of action for around a month at one site and around two months at another, despite weekly charges being paid.

The issue has since been fixed, but the operator said the concern was the process, with contractors attending several times without repairing the issue, tickets being closed and the site having to raise new ones.

He said he pays around £1,300 a year for cellar cooling service, which he feels he has to fight for.

The same operator also raised concerns over pricing, citing Cruzcampo at around £243 and a further £15,000 a year to be free of tie for wines, spirits and minerals. He operates across Stonegate and other pub companies, giving him a direct comparison across different models.

An invoice seen by the MA for a separate Stonegate pub showed annual charges including £1,322.33 for heating and cellar cooling maintenance, £1,757.40 for compliance testing, £6,256.78 for wine tie release and £3,027.84 for minerals tie release.

PCA position

The PCA told the MA the Pubs Code does not control the prices at which pub companies sell drinks, products or services to tied tenants.

However, it said pub companies must provide information about tied obligations, discounts, current prices and imminent pricing changes when a prospective tenant is considering an agreement and at rent review.

The PCA also said a significant increase in the price of a tied product or service, not just beer, may trigger rights to request a rent review and the Market Rent Only option if the requirements for a significant increase in price are met.

It said a mandatory maintenance charge, such as for cellar cooling, could amount to a tied service if it is contractually required and supplied by the landlord or a nominated party.

However, the PCA said disputes about performance under maintenance agreements were generally contractual matters, rather than matters regulated directly by the Pubs Code.

The PCA said it was aware from its survey work that price and cost pressures, repairs and maintenance, and poor communication were among key drivers of dissatisfaction among tied tenants.

It said it was engaging with all six regulated pub owning businesses on the findings and asking what actions they were taking in response.

Stonegate response

The MA asked Stonegate to respond to concerns around tied product pricing, price bands, gross profit projections, tie release fees, current pub listings, repairs, cellar cooling and service levels.

A spokesperson for Stonegate said: “We operate a partnership model built on shared success and continue to work collaboratively with our publicans. Any claim that we would seek to deliberately disadvantage our own partners is illogical and misleading.

“While we acknowledge that, within a large estate, issues can occasionally arise, including, in this case, delays to essential maintenance, these are taken seriously and addressed as a priority.

“We continue to invest record levels into our estate, alongside enhancing the tools, support and flexibility available to our publicans.

“Whilst there is still work to do, the recent PCA results demonstrate measurable progress in key areas including fairness and business support. We are also seeing increased stability across our estate and strong levels of interest from prospective publicans.

“We remain focused on building a modern, sustainable partnership model that supports our publicans and the communities they serve.”