Tuesday, 16 October 2018

Tied Houses

A subject dear to my heart. Tied house were so much part of the beer scene in my youngs days. I couldn't imagine the system breaking down But break down it did.

Back in the 1970s, something like 80% of UK pubs were tied houses. That is, where a brewery owned either the freehold or leasehold. Of the remaining 20% supposedly "free" houses, a large percentage were effectively at least partially tied through a loan from a brewery. An exception was Scotland, where loan ties were the norm and brewers owned a relativley small number of pubs.

I find this letter about a court case involving a tied house fascinating. Had the landlord won, it would have bought the tied house system crashing down.

SIR,—-Allow me, through the medium of your columns, to point out a case of considerable importance to brewers generally, and one which I hope will be taken up by our Country Brewers’ Society, should the scale turn in any but the way one would naturally expect it.

The case in question was resumed on Wednesday last, the 4th inst., at the Chancery Court of Lancaster, before the Vice-Chancellor (Sir H. F. Bristowe). It is an action brought by Messrs. Clegg & Wright and Mr. Robert Cain, brewers of Liverpool, against Mr. Benjamin Hands, lessee of the “Alexandra" Hotel, Upper Hill-street, Liverpool, for an injunction to restrain the latter from selling any ales or stouts except those supplied by or through the plaintith. Now, it seems that the defendant (Mr. Hands) is the lessee of a public-house, the property of Messrs. Clegg & Wright, and some short time ago Messrs. Clegg & Wright sold their business to Mr. Robert Cain, who is the largest brewer in the city of Liverpool; Upon the consignment of Clegg & Wright’s business to Mr. Cain, the defendant refused, and still refuses, to deal with Mr. Cain, on the grounds that the article supplied by this gentleman is not of the quality supplied by Clegg and Wright. The defendant has never dealt with Mr. Cain, and his line of defence seems to rest entirely upon hearsay, and here, I venture to say, rests the rider which will turn the scale. Independent of this, I consider, sir, that upon this case rests one of the most important points in connection with licensed property, for the simple reason should a brewer feel disposed to part with his business, any “tied" houses he may have that are leased to tenants, such tenants may, according to the line of defence, absolutely refuse to deal with anybody but the party or parties from whom their lease was obtained, and the clause in any lease explaining the fact that the lessor has power to assign his business to a second party falls to the ground, and the once “tied" tenant becomes free to deal from whom he wishes, independent of the fact that his lease may have been a hiring lease, that the rent he pays may (as it is in many cases) be even less than the rent paid by the brewer, or, on the other hand, not capable of bringing back interest upon the money invested in the property by the owner.

All I ask is justice, and I have taken the trouble, Sir, to write this letter with the hope that every paper in the interests of the brewing trade will publish full reports of this case, since it is the turning-point of a great financial difficulty, upon which many brewers have already been put to considerable annoyance and expense.

I am, Sir, yours faithfully,

The Laboralory, “City” Brewery,
"The Brewers' Guardian 1889", 1889, page 390.

If the lease of a tied house couldn't be transferred from one brewer to another, it would have a big negative effect on their value. Brewers had invested huge sums buying up pubs and would suffer big paper losses if their value fell considerably. It woulkd also make buying up rival brewers unattractive if it didn't include their tied houses. Most buyers weren't interested in the brewery itself, just its pubs.

Obviously, the landlord of the Alexandra Hotel must have lost the case. Otherewise the tied house system of my youth wouldn't have existed. At least not in the form I knew.

The Alexandra Hotel seems to have closed sometime in the last ten years.

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