Pub shares plunge as pub landlords claim beer tie 'victory'
Shares in the pub companies fell across the board amid investor fears about the impact of the end of the “beer tie”
Shares in large pub groups have fallen sharply after MPs voted to overhaul the “beer tie” system, which requires some landlords to buy beer from the companies that own their pubs.
Enterprise Inns dropped 16.7pc, Punch Taverns lost 16.8pc, and Greene King was down 4.5pc, wiping £281m off the market value of the three businesses. The sell-off was sparked a vote by MPs on Tuesday evening to change the existing business model and give tenants more freedom.
Nearly half of pubs in the UK are on the tied structure, which means the tenant landlord pays a lower property rent to their pub company landlord, and receives financial benefits, such as free satellite television or subsidised buildings insurance.
In return, they commit to only buy beer from their owner, often at above-market prices.
Campaigners complained this “exploitation” was the reason behind the rise in pub closures, uncompetitive prices and the failure to attract more tenants.
Full story: http://www.telegraph.co.uk/finance/markets/11239970/Pub-shares-plunge-on-beer-tie-fears.html