Pub - Pub Companies

Pub Companies

After the development of the large London Porter breweries in the 18th century, the trend grew for pubs to become tied houses which could only sell beer from one brewery (a pub not tied in this way was called a Free house). The usual arrangement for a tied house was that the pub was owned by the brewery but rented out to a private individual (landlord) who ran it as a separate business (even though contracted to buy the beer from the brewery). Another very common arrangement was (and is) for the landlord to own the premises (whether freehold or leasehold) independently of the brewer, but then to take a mortgage loan from a brewery, either to finance the purchase of the pub initially, or to refurbish it, and be required as a term of the loan to observe the solus tie.

A growing trend in the late 20th century was for breweries to run their pubs directly, using managers rather than tenants. Most such breweries, such as the regional brewery Shepherd Neame in Kent and Young's and Fuller's in London, control hundreds of pubs in a particular region of the UK, while a few, such as Greene King, are spread nationally. The landlord of a tied pub may be an employee of the brewery—in which case he/she would be a manager of a managed house, or a self-employed tenant who has entered into a lease agreement with a brewery, a condition of which is the legal obligation (trade tie) only to purchase that brewery's beer. This tied agreement provides tenants with trade premises at a below market rent providing people with a low-cost entry into self-employment. The beer selection is mainly limited to beers brewed by that particular company. A Supply of Beer law, passed in 1989, was aimed at getting tied houses to offer at least one alternative beer, known as a guest beer, from another brewery. This law has now been repealed but while in force it dramatically altered the industry. Some pubs still offer a regularly changing selection of guest beers.

The period since the 1980s saw many breweries absorbed by, or becoming by take-overs larger companies in the food, hotel or property sectors. The low returns of a pub-owning business led to many breweries selling their pub estates, especially those in cities, often to a new generation of small companies, many of which have now grown considerably and have a national presence. Other pub chains, such as All Bar One and Slug and Lettuce offer youth-orientated atmospheres, often in premises larger than traditional pubs.

Organisations such as Wetherspoons, Punch Taverns and O'Neill's were formed in the UK since changes in legislation in the 1980s necessitated the break-up of many larger tied estates. A PubCo is a company involved in the retailing but not the manufacture of beverages, while a Pub chain may be run either by a PubCo or by a brewery.

Pubs within a chain will usually have items in common, such as fittings, promotions, ambience and range of food and drink on offer. A pub chain will position itself in the marketplace for a target audience. One company may run several pub chains aimed at different segments of the market. Pubs for use in a chain are bought and sold in large units, often from regional breweries which are then closed down. Newly acquired pubs are often renamed by the new owners, and many people resent the loss of traditional names, especially if their favourite regional beer disappears at the same time.