Tied publicans facing financial hard times

More than half of Britain’s tied pubs are struggling financially as landlords connected to large operating companies get charged over the odds for their drinks, a report will warn today.

The Institute for Public Policy Research (IPPR) lambasted the “beer tie”, saying publicans who are contractually obliged to buy from their landlords pay up to 45 per cent more for their beer than independent pubs.

The think tank’s report shows around half of all the pubs in the UK are tied to pub companies.

In most cases, those companies let out their pubs to landlords who run their own business. But, in addition to paying rent, tenants often have to purchase almost all of their stock from the pub company.

According to the report, 57 per cent of tied publicans say they are struggling financially, compared to 43 per cent of those who are non-tied.

Some 46 per cent of tied landlords earn less than £15,000 a year, the report found.

IPPR said companies with more than 500 tied pubs should be forced to offer more flexible terms to their tenants.

Associate director Rick Muir added: “The UK government should act to reform the way the industry operates.”