Tuesday, 18 November 2014


From the BBC

The government has been defeated in a Commons vote on the control that parent companies can exercise over pubs.

MPs voted 284 to 259 in favour of an amendment allowing landlords an independent rent review and to buy their beer on the open market.

So-called "tied pubs" are required to buy supplies - often at high prices - from the companies that own the pubs.

Campaigners said the "historic" vote would help "secure the future of the Great British pub".

Of course it won't. We had beer ties for longer than I can remember, in a time when pubs were thriving. You can argue against beer ties on other grounds, like public choice, but it didn't historically close pubs.

But it's splendid news because at least it's a way of proving that high rents made sod all difference to pub closures, and maybe some of those CAMRA numpties might start supporting a reversal of the smoking ban.


Mark Wadsworth said...

TS, you are assuming that this won't work.

I agree that it probably won't, but are there any stats on the pub closures - were tied pubs worse affected than free pubs? If not, then foregone conclusion and we can sit back and laugh at them.

The Stigler said...


Straight Statistics has a rather brilliant analysis of closures that suggests there's nothing conclusive either way, that it's a lot more complicated than just comparing closed pubs.


Mark Wadsworth said...

TS, good link ta, as the man says, inconclusive.

The Stigler said...


His last comment (local pubs and drinking pubs) highly correlates with pubs where people smoked more heavily.

DBC Reed said...

I think we should be against the tied arrangement on principle since it has degenerated into a system by which the companies make money by not selling loads of cheap beer but by screwing tenants out of rents which in a state of continuous land value uplift is bad for the drinking classes because the pubcos can unload surplus buildings at a profit.
Phil Mellows is worth following in his thoughts on the People's Pubs. Nationalise the Pubs Now!

Lola said...

DBCR. No-one is compelled to be a tenanted landlord. Trouble is most of them do not read the contract when they sign up, or they think that they can boost the business and hide that uplift from the pubco when rent reviews are due.
But, as you imply, pubcos are really land speculators/rent seekers with a hobby.

The Stigler said...

I think that tied or non-tied is mostly academic. Tied - you pay lower rents, but you pay more for the booze.

If landlords are allowed to get their booze where they want, the rents will go up.

Nationalised pubs? Presumably with a pubs czar that dictates the nutritional content of meals and keeps everyone to a pint a day.

They shouldn't just be that. They should be providing landlords with the sort of support that they need, to be experts in running pubs that share that information. And some do that, especially where they have brands for pubs.

DBC Reed said...

@L As you say. A sidelight on this:I was told by an insider that Woolworth's was operating
as a property company with sales in the shops as incidental!
@TS Do you have any experience of the UK when a lot of key industries were nationalised? On a purely pragmatic comparison Mixed Economy Britain (Pre Thatcher) was much more pleasant than the present Neo Laissez faire experiment.
Phil Mellows wrote a very even-handed piece in The Publican 22.vi.09 called the People's Pubs which gives details on how the State managed pubs worked. ( I visited one in Carlisle in my youth: it permitted under-age drinking, open gambling-for-money card games and bar-girls or wandering teenage floozies.Years ahead of its time IMO)

Jim said...

A review of the smoking ban may help in some areas, but alas the core of the problem is not entirely that. Its really down to the taxes on the beer and the price of the beer. Lets face it why go to the pub and pay £3.50 for a pint when people quickly realise they can go to the supermaket and buy 4 of them for the same price.

The great british pub really did hit a downfall due to the smoking ban, many became glorified restaurants instead, though high beer prices ensure that after a meal, people leave. The pub has been destroyed over the last few years, and though its a part of it, the smoking ban is not the single reason for it.

Pablo said...

Attorney-General: Small Business, Enterprise and Employment Bill - [1st Allocated Day] (18 Nov 2014)


Grahame Morris: ...in recent years. In some cases, profitable, popular
pubs, beloved by local communities, have been sold off by big pubcos to
developers and supermarkets. Pubcos have sought to cash in on the real
estate or *land value*, with little or no thought for local people, or
the effect of the loss of a community hub. As the hon. Member for Leeds
North West pointed out, that is often because these...

Mark Wadsworth said...

Jim, you have been brainwashed.

Do you not realise that this statement is self-contradictory?

" It's really down to the taxes on the beer and the price of the beer.

Let's face it why go to the pub and pay £3.50 for a pint when people quickly realise they can go to the supermaket and buy 4 of them for the same price."

The beer duty is the same in ther supermarket and in the pub, if anything it reduces the price differential.

The extra taxes which the pub pays are the PAYE on the bar staff wages and then VAT again on top of the beer duty and the PAYE.

If they reduced VAT/PAYE and increased beer duty on a fiscally neutral basis, then the relative price difference between beer from a supermarket and beer in a pub would fall.

Basic maths.

The Stigler said...


"Lets face it why go to the pub and pay £3.50 for a pint when people quickly realise they can go to the supermaket and buy 4 of them for the same price."

But prices have always been a lot cheaper. If your intention is just to drink, you'd be crazy going to a pub for it and that's been true since the late 80s.