UK: Heineken under Investigation for Exploiting Bars
Heineken’s pub business is under investigation by the U.K. government on suspicion the global beer giant is unfairly treating its licensees who apply to go “free of tie.”
Good Beer Hunting reports that the “beer tie” was a historic clause found in most tenanted pub contracts that forces the tenant to buy beer from their landlord at huge mark-ups, supposedly in exchange for support in marketing, expertise and logistics. Under a law introduced in 2016, some pub tenants can apply to break the tie at their five-year rent reviews, but Heineken stands accused of blocking this right by exploiting loopholes. It’s now being reviewed by the government’s Pubs Code Adjudicator (PCA), a department created to advise and act as an arbitrator in disputes between landlords and tenants.
The suspicion is that Heineken is forcing exploitative stock demands on pubs, with some being told to stock over 75% Heineken-brewed or -owned products, even after breaking the tie. Apparently, the second largest beer maker worldwide is maintaining a clear stronghold on UK taps to give itself an advantage over small breweries in the UK market.
This sector will not improve until we have a market-wide investigation by the Competition and Markets Authority,” says Chris Wight, an industry consultant and expert on the Pub Code, per Good Beer Hunting.
The last time we had an investigation into the wholesale beer market was 1989. They [the big six] have a slick operation of lobbying and access to the right people, and they want to maintain the status quo at all costs.”
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