Pub Tie?

Trifid

Trifid

Trifid

Soldato
Joined
18 Feb 2006
Posts
9,860
No, not a thread about which tie should I wear to the pub.

http://www.bbc.co.uk/news/business-30110742

Why is this damaging for the industry as a whole? As I understand it, many breweries own pubs and then lease it out as a franchise to a publican? In that lease they and then committed to buying beer at inflated prices from the brewery. This limits the choice of beers they can sell and results in the punter paying inflated prices for their pint.

The only person I can see this being bad for is the breweries but they are not going to go anywhere. The pubs can remain profitable or may change owner from the brewery, but these should become more profitable.

Have I missed something?
 
It is going to be bad for breweries who brew mass produced toilet water.

It will be good for small breweries who actually brew decent beer.
 
Think it's unnecessary interference... if you want to source your own beer then rent your own pub etc... If you want to run a franchise operation then run the franchise.

What next McDonald's owners getting in different burgers and making their own menu changes. If you want to do your own thing then don't join a franchise.
 
Great news. The tie is archaic and needed shot a long time ago.

Essentially what this means, is more people can now consider becoming landlords because it now becomes more affordable. It should also allow more pubs to cater to local variations in taste, or to specialise.

If the mass brewers offered competitive pricing then this situation may not have come to a head, however as you would perhaps expect they exploited the situation. So not only have many pubs closed they have also lost the tie as well.
 
Something needs doing if they want Pubs to survive, every pub I pass is empty these days, I only go in pubs during the day where other Traders & Mates are chatting deals but I know the pubs are just as empty during the evenings & only get busy 1 or 2 nights a week.
 
step in the right direction but not sure if it's all down to pub ties - some guy on the radio this morning (ex tied landlord) was saying that high business rates & energy costs were also to blame.
 
Breweries basically sell a pub-owning experience. You pay £10k-£15k up front, and agree to buy drinks at inflated prices. You run it for a couple of years, before realising you can't make back your money, and call it quits.

The brewery then sells the same package to the next unsuspecting Al Murray wannabe.

It's better for the breweries (i.e. they make for money) to do this with the sub-prime end of their freehold pub stock than it is to try and support them as profit making enterprises. There are always people out there who fancy running their own pub.

This ruling makes that process less profitable, hence breweries don't like it.

Of course, they'll need to make money somehow on their junk freeholds. Probably just front load the contract a bit more. Or let them close completely.
 
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Can't stand pubs that have pretty much just eurofizz and Guinness on tap.
Pubs local to me have been thriving thankfully. Locally owned, get excellent local and random beers in. They have festivals and also sell meat from the local butchers :)
 
About time, breweries have squeezed the life out of so many pubs and, as someone pointed out above, made them unprofitable to run. The rents and prices they charge landlords are ridiculous - I've read they charge upwards of £150 for a keg of lager that costs £90 or less wholesale. It just seems like a totally unfair model, landlords should be free to buy from who they want and create some competition in the market.
 
More pubs will then be able to re-open and/or remain in the hands of the same landlords for extended periods.

The breweries can still make money from rent (and ale too, if they sell at market rate).
 
Flying_Hellfish said:
More pubs will then be able to re-open and/or remain in the hands of the same landlords for extended periods.

The breweries can still make money from rent (and ale too, if they sell at market rate).
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This is what's ridiculous, if breweries tied landlords in to market rate rents and beer prices they'd still be securing themselves a nice amount of steady income. It's just greed that they overcharge so much.
 
One More Solo said:
About time, breweries have squeezed the life out of so many pubs and, as someone pointed out above, made them unprofitable to run. The rents and prices they charge landlords are ridiculous - I've read they charge upwards of £150 for a keg of lager that costs £90 or less wholesale. It just seems like a totally unfair model, landlords should be free to buy from who they want and create some competition in the market.
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Nail on head.

My aunt started getting screwed by Punch Taverns after the 2008 financial shenanigans kicked in, and their balance sheet looked appalling after the property portfolio crashed in value.

She gave notice to quit as the numbers were not adding up and agreed to stay month to month until they found a someone to take over. Punch couldn't find anyone else to take over. Shocker. That in turn allowed them to negotiated a decrease in the beer prices, plus some flexibility on getting more Guest Ales in from local suppliers...
 
One More Solo said:
This is what's ridiculous, if breweries tied landlords in to market rate rents and beer prices they'd still be securing themselves a nice amount of steady income. It's just greed that they overcharge so much.
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That's how a franchise works... your local subway owner can't just source his own bread rolls and chicken etc... the company behind the franchise will make money from supplying the franchise owners too. You don't get to open a McDonalds and decide the Burger King chips are better so you'll serve them instead.

No one is forcing a pub owner to contract with a big brewery. Forcing the franchise arm of a business to turn into essentially a property management operation is wrong...
 
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dowie said:
That's how a franchise works... your local subway owner can't just source his own bread rolls and chicken etc... the company behind the franchise will make money from supplying the franchise owners too. You don't get to open a McDonalds and decide the Burger King chips are better so you'll serve them instead.

No one is forcing a pub owner to contract with a big brewery. Forcing the franchise arm of a business to turn into essentially a property management operation is wrong...
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I've always thought the reason they've turned into franchise pubs is because they couldn't afford to it independently. The beer would be priced out of their reach.
 
The difference is subway and mcdonalds franchisees make money and the brand pulls in customers.

Tied pubs do not make money and the brand is irrelevant (even a negative at times).

I do agree it's a shocking interference in the commercial operations of a private company but they have abused a monopoly position where barriers to new entrants are quite high (it's next to impossible to get a building converted to use as a licensed premises in residential areas - i.e. the local pub rather than town center bar).
 
dowie said:
That's how a franchise works... your local subway owner can't just source his own bread rolls and chicken etc... the company behind the franchise will make money from supplying the franchise owners too. You don't get to open a McDonalds and decide the Burger King chips are better so you'll serve them instead.

No one is forcing a pub owner to contract with a big brewery. Forcing the franchise arm of a business to turn into essentially a property management operation is wrong...
Click to expand...

As far as I know, these sorts of contracts are seen as commercially unbalanced as the sums payable to the franchisor are stepped in in such a way, increasing costs considered, that is likely if not inevitable to result in a default for the franchisee.
 
As much as I hate going in pub after pub selling exactly the same range of beers, I don't see how this helps anyone. The breweries have made an investment so why shouldn't they have some say in how the pub is run? There's plenty of independent/small chain pubs near me so it's not like there isn't an alternative.

I'm no expert though so maybe I'm missing something.
 
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