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Parliament passes rent only option for tied tenants


After a fierce debate, and to the surprise of many campaigners, the House of Commons passed a bill on the 18th November which will allow a Market Rent Only Option to be provided by large pub-owning businesses for tenants and leaseholders. This means that these tenants and leaseholder will be able to buy their beer and other goods free of the “tie”.

The reaction was mixed with campaigners for this option hailing it as a landmark victory for beer drinkers, pub goers and licensees. Indeed Tuesday’s vote was the government’s first defeat on one of their bills since the coalition formed in 2010.

Tim Page, CAMRA’s new Chief Executive said:

“The Government was defeated by 284 votes to 269 with MPs from all parties voting in favour of a new clause to the Small Business Bill that will empower pubco licensees to choose between a tied agreement and a market rent only agreement that will allow them to buy beer on the open market. Allowing over 13,000 pub tenants tied to the large pub companies the option of buying beer on the open market at competitive prices will help keep pubs open and ensure the cost of a pint to consumers remains affordable. The large pub companies will no longer be able to charge their tenants prices up to 60 pence a pint higher than open market prices.”

“This simple choice should spell the end of pubco licensees being forced out of business through high rents and tied product prices.”

Going into the Small Business Bill debate, the cross-party amendment was signed by 91 MPs, with the Fair Deal for Your Local campaign itself having 212 MPs signed up as supporters. The campaign was also backed by ten organisations including the Campaign for Real Ale, Federation for Small Businesses, Forum for Private Business, GMB and Unite.


New Clause 2 had been tabled by Greg Mulholland, Chair of the All-Party Parliamentary Save the Pub Group and pictured above, Adrian Bailey, Chair of the BIS Select Committee and Brian Binley, a member of the Select Committee and President of the Save the Pub Group, with support from many pro-pub and pro-small business MPs across the House. In the run up to the vote, over 8,000 CAMRA members contacted their MPs urging them to back the clause.

Market rent only will allow tenants of the large pub companies the right, at rent review or renewal, to ask for an independent assessment of their rent without tie obligations, then have the option to pay this to the pub owning company – or to opt for a fair tied agreement with a lower rent being offered in exchange for higher beer prices.

However Brigid Simmonds, BBPA Chief Executive, said:

“This change effectively breaks the ‘beer tie’, which has served Britain’s unique pub industry well for nearly 400 years. It would hugely damage investment, jobs, and results in 1,400 more pubs closing, with 7,000 job losses – as the Government’s own research shows. There are serious legal and competition issues which must be faced, as it rides roughshod over what are previously agreed contracts, and creates an unworkable, two-tier market. I hope Parliament will rethink as the bill continues its progress.

“On the issue of family brewers remaining outside the scope of the Code, we have always taken the view that their inclusion is not necessary, provided that this does not result in a distortion to competition. As the Government is now saying it will not include these smaller companies it needs to ensure a level playing field throughout the legislation.”

Only time will tell which is the correct analysis and whether this new law will prevent or accelerate more pub closures.

You can see how your MP voted as well as reading a transcript of the debate here

You can also watch the whole debate in the House of Commons here