Campaign for Pubs

Campaign for Pubs calls on Stonegate Pubs to scrap ‘grotesque’ glassware charges for tied tenants in the cost-of-living crisis

The Campaign for Pubs has written to Stonegate Pubs, slamming their decision to introduce charges brewers and cider makers branded glasses, which they have been previously been supplying for free to tied tenants.

The new charges, imposed in the midst of the cost-of-living crisis, are for branded glassware across Stonegate’s leased and tenanted pubs. Stonegate tenants are dismayed at this new charge, with the serious pressures that all publicans are facing and have said they feel like “second-class citizens” as reported in the Morning Advertiser.

The letter from the Campaign for Pubs to Stonegate challenges the decision and asks if Stonegate have the right to impose their charges on tenants and also questions what legal right they have to impose charges on tenants who obtain branded glasses from breweries/suppliers direct. Many breweries supply branded glasses direct and free of charge to pubs (and do so routinely to free trade/free-of-tie pubs to have their beers stocked). Many breweries and cider producers are keen for their beers beer supply in the correct glassware. In addition, serving drinks, including beer and cider in glasses branded with another beer/cider, is a breach of the Trade Descriptions legislation, so the option is to serve everything in plain glasses.

The Campaign has also written to the Pubs Code Adjudicator, Fiona Dickie, asking her to investigate and see whether the move breaches the ‘fair and lawful’ dealing principle in the Pubs Code.

The move also comes at a time when Stonegate have published their most recent end of year figures, showing that Stonegate have doubled its revenue from the previous year to £1.61 billion, with earnings of £465 million, which makes the decision to impose the new and unacceptable cost on struggling tied licensees even more distasteful.  Stonegate are the largest pub company in the UK since 2020, when they purchased the EI Group (formerly Enterprise Inns) for £1.27 billion.

The Campaign for Pubs has also pointed out that the cynical move by Stonegate also makes a mockery of Stonegate/pubco claims that the grossly excessive prices imposed on tied tenants somehow leads to ‘Special Commercial or Financial Advantage’ (SCORFA) which is what the pubcos and their lobbyists say justifies the tied model. One of the things passed off as a supposed benefit to tied licensees is supply of branded material/point-of-sale material that in actual fact is from producers, and simply passed on by non-brewing/producing pubcos. This is yet another example that in reality, the onerous tied terms imposed on pubco tenants, including hugely inflated beer prices, are not offset with any meaningful benefits, which is the only justification for artificial and anti-competitive tied pricing.

The decision follows a Small Claims Court case against Greene King taken by Campaign for Pubs Director and former publican Gary Murphy in 2020. Greene King had told Gary, who was the tenant of Ye Olde Mitre in Barnet, that they would no longer provide branded glasses for free through his lease as they had done for the previous 12 years, but intended to charge him for ordering them direct from breweries/suppliers. In that situation, Greene King had been asking tied tenants to contact brewers direct to order branded glasses, but that Greene King would subsequently levy a charge per box for doing so!

Whilst Gary failed to win the case that glassware to be an implied term in the lease, the Court was absolutely clear that Greene King had no contractual right to charge the tenant for untied supply items. Greene King told the Court that they would not do so. This is precisely what Stonegate are doing and it is therefore potentially unlawful as well as clearly unfair.

Greg Mulholland, Campaign director of the Campaign for Pubs said:

“For Stonegate Pubs to introduce charges for branded glasses during this cost-of-living crisis is grotesque and once again exposes the one-sided reality of the unfair and restrictive tied model operated by these huge pub companies.

“With many Stonegate tenants already struggling with huge energy bills and inflated tied beer prices, to slap a new charge, for glasses that freehouses could get for nothing, is a cynical abuse of their position. The move is unfair, and we also believe that it may be unlawful and we hope the Pubs Code Adjudicator will investigate this unfair dealing, as she has the power to do”.

Gary Murphy, a Director of the Campaign for Pubs and a former tied tenant said:

“It is bitterly disappointing that Stonegate Pubs are imposing a new and deeply questionable charge for branded glass on their tied tenants and to do so in the current cost-of-living crisis is disgraceful.

“The large pubcos are have a very close relationship with the big brewers and these charges are another example of the anti-competitive nature of the pub sector and the way large corporations not only try to dominate, but also don’t treat their own tenants fairly. We call on Stonegate to drop these charges and if they don’t, this is a decision that should be challenged in any ways possible”.