It has long been a complaint of pub leaseholders that some landlords make them buy beers at high prices which make them uncompetitive and even to go out of business.
Now the government, which has been trying a voluntary approach, has proposed to set up a Code of Practice for companies owning more than 500 pubs, with enforcement from an Adjudicator.
Business Secretary Vince Cable said: “We gave pub companies every chance to get their house in order. But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn’t working.
“Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship.
Take a look around brand new Lidl store in Houghton Regis
Luton Airport's new £225m DART project will be run by a new subsidary company
Emirates Airline to host Pilot Roadshow at Luton Airport
Jobs boost as work starts on Lidl in Houghton Regis
New store for Houghton Regis as Lidl opens its doors next week
“Pubs play a valuable role at the heart of our communities and we urgently need a change to help them survive and become profitable. These plans will do just that and could save pub tenants £100 million per year by making sure that pub companies charge their tenants fair rents and beer prices.”
The new proposals could also allow tied pubs to have independently picked guest beers and help the growth of small beer and ale manufacturers across the UK.
The pub industry represents many small businesses, employing hundreds of thousands of people across the country.
Employment Relations and Consumer Minister Jo Swinson said: “We are committed to stamping out abuse of the beer tie and helping British pubs to thrive. It has been a huge concern of mine that pubs, often the hub of our communities, are closing down at an alarming rate. What is also shocking is that the figures show that almost half of tied pubs earn less than £15,000 a year, and struggle to make ends meet because of rising beer prices and rent.
“I have heard about a variety of unfair practices such as large unjustified increases in rent, and am clear that this sort of behaviour is not good enough.”
The consultation is available to view online at https://www.gov.uk/government/consultations/pub-companies-and-tenants-consultation and will run until June 14.