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Brussels backs S&N tied pubs

The European Commission yesterday gave its biggest endorsement yet of the British tied-pub system. Scottish & Newcastle, Britain's biggest brewer, has been given the provisional all-clear to operate a tie, under which it requires tenants to buy its own beers in return for lower rents and discounts. The announcement comes in the wake of the Commission's preliminary decision to allow Whitbread to keep its tied leases.

However, pub owners still face a battle over allegations by tenants who say they were forced to accept unfair ties. Brussels' approval of the tied system has proved unpopular with many tenants who are fighting a rearguard action to have the decision overturned. More than 90 of Whitbread's tenants are believed to have lodged a complaint to Brussels, claiming that figures provided by the brewing group do not give a fair reflection of the benefits available to them under the tied system.

Legal action from Inntrepreneur pub tenants against the tie is also set to burst into the open this year. Inntrepreneur, now owned by Nomura, the Japanese investment bank, has been forced to withdraw its application to the Commission to have old tied agreements ratified, due to pressure from disgruntled tenants who have complained vociferously to Brussels.

Julian Maitland Walker, a solicitor representing Inntrepreneur tenant groups, said yesterday: "We are hoping to put several test cases before the High Court this year. This [European Commission] decision does not vindicate the entire tied-pub system, only those that can demonstrate that benefits available compensate fully for having the tie."

However, the decision is good news for small brewers and hundreds of village pubs which, according to the Campaign for Real Ale, could have gone out of business if the tied system was outlawed.

- Andrew Yates