Brewery lauds tenancy status quo

St Austell Brewery has praised the Government’s decision not to impose strict controls on the way breweries work with pubs they own.

Following a review, the Department of Business, Innovation and Skills says it will continue to protect the traditional tied tenancy model, which requires licensees to buy their beer from the pub operator.

Breweries say the decision will help avert the spectre of pub and brewery closures, safeguarding many jobs in the process.

St Austell Brewery MD James Staughton said: “The Government has provided a substantial boost in confidence for family brewers, and their tenants.

“As a family-owned company, we take a long view of investment into our pub buildings and, within the traditional brewery tenancy agreement, we take the costs of looking after and improving the buildings we own. This is a centuries old business model and allows a strong partnership between licensee and brewer, sharing the ups and downs of trading the pub.

“Thanks to the support the Government has announced for the traditional brewery tenancy agreement and the beer tie, we will now be able to increase investment into our pubs.”

However, not everyone is happy. John Walker, national chairman of the Federation of Small Businesses, said: “Seven years since this process began, the Government still has not taken the action most needed to help pub owners from being mistreated by some of the larger pub companies.”

And Phil McCabe, from Forum of Private Business, added: “The pubco business model does not work and relies on squeezing small landlords until they have nothing left.”

“This is clearly a case of indulging market failure at the expense of thousands of small businesses – significantly more tied pubs are closing compared to free-of-tie pubs, many of which are actually opening their doors.”