Thursday, April 14, 2011

Martin Horwood has done well to grasp the magnitude of the situation with pubs in Britain but the unfortunate reality is that as long as the beer tie exists in any legally enforceable form that is not a voluntary agreement between two parties it will be abused to extract all profit from the weaker party and pass it to the more powerful. The tie will NEVER be benign or of benefit to a pub unless it is tightly regulated.

The ONLY scenario where the tie can be of benefit to a lessee is where a binding supply agreement is negotiated with a brewer or the freeholder of the pub in return for their making capital investment in the premises. In this instance a legally binding agreement is entered into between a lessee and an outside party - rather like a small business getting a loan from a bank - and beer is supplied at above open market price. Basically a repayment loan in slightly different form.

Here both the lessee (pub) and the freeholder / brewer have a direct interest in the upkeep of the premises because a well looked after building attracts more custom; they sell more products and make more money, the income from which repays the investment with interest.

J Mark Dodds
The Sun and Doves
the Fair Pint Campaign

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