Landlords to vote on 'beer tie' action

Landlords are set to vote on whether to hold industrial action to force a deal from pub-owning companies ('pubcos'), who they say are overcharging by thousands of pounds each year.

The ballot will take place in the new year, the GMB union says, as tenant landlords decide if they will try to leverage £12,000 each in annual cuts from the wholesale prices they are obliged to pay the pubcos to which they are bound.

This figure takes into account the complex rents which landlords must also pay to the pubcos - but it underestimates the true cost, the GMB says.

According to the union, the 25,000 lessees - who are bound in the so-called 'beer tie' system to one of seven large property companies - are in effect paying up to double the price of alcohol on the open market.

The action through the GMB is the result of lobbying by the Fair Pint and Pub Revolution campaigns. It comes at the end of a difficult year for the pub trade.

Beer lobby group the Campaign for Real Ale (CAMRA) announced last week that it is continuing its own fight to free tenants from the beer tie, which it blames for contributing to the 52 UK pubs which were said to be closing each week earlier in 2009.

CAMRA is seeking Government intervention - or a referral to the Competition Commission - following a decision in October by the Office of Fair Trading, which found that the beer tie system affects neither prices nor consumer choice. However, the Business and Enterprise Select Committee called in May for the practice to be referred to the commission.

GMB national officer for tied tenants Paul Maloney said that pubs would lower their prices to customers if its members voted for industrial action, with the union's plan being to force wholesale price cuts through negotiations with the pubcos. He said that it would cost the chains £300 million a year to "remedy" the current 'overcharging' - an easily affordable sum, according to GMB.

"In 2008 the top five pubcos made profits before interest and tax of £1,456 million, so they can well afford to charge lower wholesale prices to stop the overcharging," Maloney added.

IMAGE Clara Molden/PA Wire