May 16, 2017
Reform of ‘beer tie’ rules hits business at Ei Group
Ei Group, the pub owner and operator formerly known as Enterprise Inns, said deals it had struck to cut the "Beer tie" had reduced net income from those pubs by almost a fifth. Four have resulted in free-of-tie deals that Ei estimates may result in an 18 per cent cut in its net income from those pubs, as the loss of income from supplying beer is only partially offset by higher rents. Simon Townsend, chief executive, said Ei provided support services and investment to tied publicans and that they faced the loss of this by going free of tie. Ei has been responding to the reforms by getting into the business of running pubs directly, rather than in partnership with a tenant, which will sit alongside its third business of running a property portfolio of pubs that it rents on commercial arm's-length terms. Ei now has about 300 free of tie pubs and another 185 pubs that it runs itself.
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