By theguardian |

Heineken's pub and bar business investigated by PCA over 'beer tie'

Regulator to see whether Star Pubs & Bars puts unfair terms on market rent only tenancies

Heineken’s pubs and bars business is to be investigated over whether it imposes unfair terms on publicans who try to cut the “beer tie”, a centuries-old arrangement under which they buy beer from the owner of their premises.

The pubs code adjudicator, the regulator that has been criticised for being supine in the face of deep-pocketed pub companies, said it had launched its first ever investigation, examining the behaviour of Heineken-owned Star Pubs & Bars since July 2016.

The PCA will look at whether Star, which has 2,700 pubs, has tried to impose unfair terms when tenants seek a “market rent only” option, an arrangement designed to allow tenants to sever the beer tie but which critics say is ineffective and often has strings attached.

Pub landlords who rent their premises from Star will be asked whether the company tried to force them to stock only Heineken keg beer, or an unreasonable volume of the Dutch beer company’s brands, or other drinks in which it has a financial interest.

They will also be asked whether Heineken tried to influence the retail price of its brands as part of an MRO agreement.

Fiona Dickie, the deputy pubs code adjudicator, said: “It is important that Star tenants and other interested parties provide us with information to support this investigation. Their information will help us to determine whether the pubs code has been broken and, if so, what further action should be taken.”

The investigation covers the period since the introduction in 2016 of the pubs code, which regulates companies with more than 500 establishments, including Admiral Taverns, Ei Group (formerly Enterprise Inns), Greene King, Marston’s and Punch Taverns.

The code is meant to ensure “fair and lawful dealing” by major pub companies and that landlords are not worse off than they would be if they were free of the beer tie.

The MRO section of the code is intended to provide a system under which landlords can escape the tie by negotiating a new agreement with their pub company, with the PCA overseeing an arbitration process.

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Publicans have frequently criticised the MRO option for being ineffective and the PCA for not doing enough to uphold its integrity.

Any landlords who submit evidence have until 5 August and will not be identified in the final report.

A Star spokesperson said: “The legislation is clear that as a brewer we have the right to ensure that the pubs we own sell our beer and cider. This reflects the significant ongoing investment we make and the jobs we support in our UK breweries, cideries and supply chain.

“While the principle of the brewers stocking requirement is clear, this part of the new legislation is complex and not clearly defined in the pubs code. We therefore hope that this investigation will provide the certainty and clarity that we have sought repeatedly over the past three years. We will of course cooperate fully with the PCA whilst robustly defending our position.”

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