Pubco shares drop after ‘historic’ vote

A VOTE IN the House of Commons to amend the Small Business, Enterprise and Employment Bill has seen the share prices of a number of pub companies fall.

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MP’s voted 284 to 259 to amend the bill and allow pub landlords’ an independent review of market rents and to buy beer from a supplier of their choice.


Described by campaigners as ‘historic’ the changes will potentially end the practice of ‘tied tenancies’ whereby landlords must buy beer – often at high prices – from their parent companies.   As a result shares in Enterprise Inns and Punch Taverns, amongst others, dropped in just a few hours of the announcement.


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.


The amendment was put forward by Lib Dem MP, Greg Mulholland, the chairman of the all-party Parliamentary Save the Pub group who described the “tie” arrangement made between a pub and its owner as an “archaic” and “extraordinary” system.


While campaigners are celebrating the victory, a number of pub companies including Punch Taverns have come forward to express concern over the implications.


Describing the amend as ‘contrary to existing legal contracts and property rights’ Punch warned it would ‘lead to creation of an unworkable two tier economic market’ resulting in the closure of hundreds of extra pubs and the loss of thousands of jobs.