GOVERNMENT DECISION IS APPLAUDED BY BEDFORD BREWER
The decision has averted a potentially disastrous situation, with brewery closures, the loss of well-known and respected beer brands and pub closures all being predicted had the agreements been abolished. Jobs of local people and suppliers, as well as consumer choice and competition, have also been saved.
In a response to the House of Commons Business, Innovation and Skills Committee’s tenth report of session 2010-2012 into pub companies , the Government has recognised that, particularly in the case of the traditional tenancy model, the tie may play an important role in safeguarding the future of Britain’s smaller breweries. Acknowledging that the traditional tenancy model not only provides a low cost entry for a licensee wishing to open a pub but also offers a low cost/low risk exit, as neither the freehold nor the lease need to be sold on, the response also recognises that the tied model may be essential to the preservation of small British brewers and local beer, as well as British businesses and jobs.
Speaking after the announcement, Paul Wells, Chief Executive of Charles Wells said: “The Government has provided a substantial boost in confidence for Family Brewers, and their tenants, by ending the uncertainty surrounding the report’s recommendations and explicitly supporting the traditional tenancy model, as well as recognising that the brewery tie is vital for regional brewing.
“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.”
Consumer Minister Edward Davey added: "This is good news for everyone to raise their glass to. It gives the industry more certainty, which is vital to the success of Britain’s Family Brewers; and it gives pub-goers the knowledge that they are drinking a fairer pint down their local.”
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Notes to editors
A brewery tied tenancy is a short term renewable tenancy agreement, typically for a three to six year term, with a full or partial drinks tie. The cost is low because new tenants only have to purchase the trade inventory when they enter the pub, together with stock at value and a refundable trading deposit. The risk is also low because the member brewery maintains the structure of the pub, decorates and signs the exterior, provides building insurance and maintains fixtures, unlike a lease which are fully repairing and insuring.
The Independent Family Brewers of Britain
The Independent Family Brewers of Britain was founded in 1993 to defend the tie and currently operates around 4,200 pubs in the UK; its members include some of the most respected brewers in Britain. The Family Brewers represent a distinct and unique sector of the UK brewing industry; owning regional breweries and pub estates, with the majority being private, family run businesses. Spanning generations, Family Brewer members’ currently employ around 36,000 people across their breweries and pubs.
