Tennent’s owner to press for break-up of beer tie

John Gilligan: 'Tenancy model has served its purpose'
John Gilligan: 'Tenancy model has served its purpose'
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Beer maker Tennent Caledonian Breweries will today kick off a campaign aimed at extending reforms to historical beer “ties” north of the Border.

The Glasgow-based group said last week’s shock defeat for the UK government over the current system – which sees tenants pay lower rent to pub companies in return for higher beer prices – would improve market access.

An amendment to the Small Business Bill, which still needs to go to the House of Lords, seeks to allow tenants to demand a “market rent only” option and buy beer on the open market.

Tennent’s managing director John Gilligan said: “As a major regional brewer, we operate in a free market and think the tenancy model has served its purpose. People in the tenancy business are struggling badly, so we need a change to free the market up and allow people to make money and survive.”
 The firm, which produces brands such as Caledonia Best, Tennent’s and Magners, has invested more than £30 million in Scottish pubs over the past three years and recently launched the Drygate craft brewery in Glasgow in partnership with Williams Bros.

Gilligan said cutting the beer tie was “the biggest and most exciting opportunity” to present itself to the trade since the Beer Orders of 1989, which sought to limit the number of pubs a brewer could own.

“We really feel this is a great opportunity for suppliers and on-trade publicans to make more money and get a better business,” he added.

The British Beer & Pub Association said research shows breaking the beer tie would result in the closure of 1,400 pubs and the loss of 7,000 jobs. But Gilligan told The Scotsman: “Of course there is an argument the ‘pubcos’ will be forced to put their rents up and find other ways of getting the money, but we don’t believe that is the case.”

Tennent’s is writing to MPs and MSPs to garner support for Scotland to adopt the reforms. It said: “We believe it’s in the interest of Scotland’s pubs for Holyrood to implement the legislation at the same pace as the rest of the UK.”

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