The House had the Second Reading of the Small Business Enterprise and Employment Bill last week – a bill on which the Government suffered a surprise defeat at the very end of proceedings in the House of Commons as a result of which the pub “tie” – by which brewers give financial and other support to their tenants in return for selling the brewery’s drinks – will be brought to an end.
This is a popular decision arising from public disappointment at pub closures linked to resentment at what is seen as predatory behaviour by pub owners.
Sadly the truth is more complex. The pub sector is one under severe strain – people can buy alcohol in the supermarket at less than half the price they have to pay in a pub (tied or untied) so they drink at home; rapid socio economic change and the deindustrialisation of recent years have robbed pubs of many of their core supporters; the rising tide of regulation and costs have also taken their toll. So I fear pubs are likely to continue to close.
To minimise losses pubs have to select and focus on a target market – be it food (fine dining or pub grub), families (play areas for kids), younger men (sport on TV and pub games) or the retired (cheaper food, especially at lunchtimes).
To achieve this focus successfully requires know how and capital. These are what pub owners provide – and do so in return for being able to sell their drinks – “the tie”.
Remove the tie and you risk removing this source of funding and advice. So perversely ending the tie may accelerate the rate of pub closures not slow them.