Pub ties leave a bitter taste
A HARTLEPOOL landlord has backed calls for government to abolish pub ties, describing them as “vile and wrong”.
Geoff Eccleshall, who took a 21-year fully-tied lease on The Causeway from Marstons in 2003, said the difference between having to buy all his alcoholic and soft drinks through the brewery rather than on the open market was an £18,000 loss last year compared to what could have been a £50,000 profit.
“On numerous occasions we have been in touch with the brewery to release the tie partially or totally or make the rent more realistic,” said Mr Eccleshall. “When the lease had a value, you could sell it. Now it’s a millstone to be honest.”
Last week, the Federation of Small Businesses (FSB) launched a broadside against pubcos, which it blamed for driving more than 50 locals out of business every week. It said the high cost of drinks - for which tied licensees are typically charged 50% more by the brewery than they would by other suppliers - was crippling trade and called on the government to ban ties.
Hartlepool-based Colin Griffiths, FSB representative for its North-east policy unit and a former brewery business manager who went on to run his own chain of pubs, said: “I have come across people locking the door because they cannot continue to trade. The local ultimately will not exist any more.
“It makes no sense to drive them out of business. The way forward is to work with licensees to keep pubs open. If that means effectively subsidising the rents, that would be ideal, because I cannot see them (breweries) reducing the cost of beer.”
Mr Eccleshall, who is a joint leaseholder with partner Eileen Clyburn, said that while all landlords were suffering, tied leaseholders were in the worst possible position, locked into a failing business and saddled with a worthless asset. “I couldn’t even give the lease away,” he said.
Pub companies were living in a “Dickensian world”, he said, and while they could do nothing about the smoking ban and the credit crunch, releasing landlords from a “feudal” system of ties could make all the difference.
“Turnover has fallen dramatically in the past two years. We’ve seen a 25% drop in common with most other pubs. We lost 12-13% following the introduction of the smoking ban - which, even though I’m a smoker I agreed with - and another 12-13% as a result of the credit crunch. If the government eliminated the tie, they would save a lot of pubs.
“Ties are feudal. It’s like renting a house from Middlesbrough Council and them saying you can only shop in the Middlesbrough grocers, which is twice as expensive as Tesco and if you shop in Tesco, we will evict you.”
Sophisticated monitoring systems - of which Stockton-based Brulines is the most widely used in the UK - mean publicans risk heavy penalties if they are caught selling stock not bought through the brewery. According to a FSB survey, 73% of tied publicans support a ban. The FSB is also calling for an independent ombudsman and a statutory code to ensure transparency at rent reviews.
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