Beer Tie-in agreements challenged by pub tenant
According to an article in The Sunday Times on the 18th August The Black Lion in Kilburn, North-West London, was planning to take the extreme step of ripping ‘out all of its beer taps and pulling its last pint in protest over prices charged by owner Enterprise Inns.
Pub tenant, Brian Mannion, 45, says he is forced to pay prices for certain draught beers that are 66% above market rates. He has a “beer tie” agreement with Enterprise, which obliges him to buy ale and lager from the parent company. But he says the prices charged for draught beer are forcing him to operate “with one hand tied behind his back” as he can’t pass the price rises on to his drinkers, who will simply go elsewhere.
This row is typical of the sort of conflict that has led the Government to propose a powerful new organisation that will ‘police the relationship between large tenanted pub groups and their landlords.
A government consultation is under way on proposals to create an adjudicator with the power to fine large pub companies that are found to have mistreated their tenants.
“As specialists in pub finance we can advise on such things as beer tie-ins as part of our business planning advice and would definitely support the creation of an adjudicating body for pub tenants,” comments Chris McDonagh for Stewart Hindley & Partners
â€œIn todayâ€™s challenging economic climate, it is even more important than ever to examine the details of pub tenancy contracts and look carefully at other options available. We are specialist commercial property lenders for the pub sector and can recommend the best pub mortgage solutions for your business,â€ added Chris McDonagh for Stewart Hindley & Partners.
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