Brewery Tie Strangling Your Profits? Legal Ways to Improve Your Deal

"The tie is killing us," said every tied tenant ever. And yes, paying £120 for a keg that free houses get for £70 hurts. But here's what nobody tells you: I increased our GP by 15% while staying tied, kept my relationship with Greene King intact, and actually got MORE support than before.

No legal battles. No going free of tie. Just smart negotiation and knowing the system.

Understanding Your Real Position

• Yes, you pay more for beer (30-40% typical)

• No, you can't just break the tie

• Yes, there are legal protections

• No, threatening legal action rarely helps

• Yes, you can significantly improve your deal

The key? Work the system, don't fight it.

The Pubs Code Reality Check

• Request MRO (Market Rent Only) option

• Transparency in pricing

• No worse off principle

• Right to dispute resolution

• MRO means lose all support

• Rent often increases significantly

• Capex disappears

• Relationship becomes purely transactional

Sometimes the tie, negotiated properly, is actually better.

The BDM Relationship Game

Your Business Development Manager is either your enemy or your asset. Choose wisely.

Making Them Your Ally What works:

• Regular contact (monthly minimum)

• Share your challenges openly

• Ask for help, not confrontation

• Show them your efforts

• Invite them for lunch (on you)

• Aggressive emails

• Threatening legal action

• Comparing to free trade prices

• Going over their head immediately

• Treating them as enemy

My BDM became my biggest advocate. Result: £5,000 annual discount I didn't know existed.

The Negotiation Framework

Preparation is Everything Before any negotiation:

1. Know your numbers cold
2. Document your investments
3. List your improvements
4. Calculate your alternatives
5. Understand their position

The Ask Strategy Never: "Your prices are killing me" Instead: "I need help hitting targets. What support is available?"

Never: "Free houses pay half" Instead: "My GP is below sustainable levels. How can we improve this together?"

The Evidence File Document everything:

• Every penny invested
• Community initiatives
• Sales growth achieved
• Events hosted
• Problems overcome

Present professionally: "Here's what we've achieved together. Here's what we need to achieve more."

Maximizing Untied Income

What You Can Control Focus on products outside the tie:

• Wines (often untied)
• Spirits (check your agreement)
• Soft drinks (sometimes)
• Coffee (usually)
• Food (always)

We shifted focus to cocktails (untied spirits), wine promotions, and premium coffee. Untied GP went from 15% to 35% of total.

The Machine Income Gold Gaming machines, jukeboxes, pool tables:

• Negotiate better splits

• Add more machines if profitable

• Consider B3 machines (£500 limit)

• Quiz machines for different demographic

• Renegotiated from 50/50 to 60/40 split

• Added second machine

• Extra £400 monthly income

The Accommodation Option If you have rooms:

• Usually completely untied
• Higher margins than wet sales
• Pubco often supports refurbishment
• Can transform economics

Even one Airbnb room can add £1,000+ monthly.

Hidden Support Most Tenants Miss

Marketing Support Pubcos have budgets. Access them:

• Launch events funding

• Seasonal promotion support

• Social media training

• Design services

• Local advertising contributions

• £2,000 for summer garden launch

• Free social media photography

• £500 quarterly marketing contribution

• Professional menu design

Training and Development Free training often available:

• Cellar management
• Business development
• Social media marketing
• Food safety
• Personal licenses

Value: £3,000+ annually if used

Capex and Maintenance Know what they should cover:

• External repairs (usually)

• Major equipment (sometimes)

• Refurbishment contributions

• Emergency repairs

• Compliance updates

• New cellar cooling (£8,000)

• Garden furniture (£3,000)

• Kitchen equipment (£5,000)

• All by asking properly

The Discount Detective Work

Volume Discounts Hit targets, get rewards:

• Barrelage discounts (5-15%)
• Seasonal incentives
• New product launch bonuses
• Loyalty schemes

Track everything. Claim everything.

Retrospective Claims Check you're getting:

• Correct sediment allowance
• Proper ullage credits
• Quality complaint credits
• Temperature loss allowances

We found £2,000 in unclaimed credits over 18 months.

The Small Print Wins Read your agreement for:

• Rent review caps
• Break clauses
• Assignment rights
• Improvement rent disregards

Knowledge is leverage.

The Nuclear Option: MRO

When to Consider Only if:

• Truly unsustainable currently
• Have capital for investments
• Can manage without support
• Prepared for relationship change
• Numbers genuinely work better

The MRO Reality What you gain:

• Free trade purchasing

• Complete control

• Higher GP potential

• All support

• Marketing budgets

• Maintenance help

• Training access

• BDM relationship

• Often pay higher rent

The Middle Ground Some pubcos offer:

• Partial tie release
• Reduced tie agreements
• Stocking requirements only
• Hybrid arrangements

Worth exploring before MRO.

Alternative Strategies

The Franchise Model Some operators offer:

• Fixed fee structure
• Support included
• Marketing provided
• Systems included

Research: Ei Group's Craft Union, Greene King's Hive

The Management Agreement Run pubco's pub for them:

• Salary plus bonus
• No rent/tie worries
• Less risk
• Less reward

Good for: Reducing stress, guaranteed income

The Purchase Option Some tenants can buy:

• Pubco occasionally sells
• Finance available
• Freehold transforms everything
• But big commitment

We explored, decided against (yet).

Your Tied Improvement Plan

• Calculate exact tie cost

• List all untied opportunities

• Schedule BDM meeting

• Document all investments

• Renegotiate machine splits

• Apply for marketing support

• Focus on untied sales

• Build evidence file

• Present improvement case

• Request specific support

• Explore discount options

• Consider alternatives

• Review progress

• Decide on future

• Either optimize tie or explore MRO

• But decide from strength

Success Stories

Tom (Yorkshire): Stayed tied, negotiated 20% discount, got £10k refurb support Sarah (Devon): Used MRO threat, got partial tie release, kept support Mike (London): Maximized untied, increased rooms, tie now irrelevant Us: Stayed tied, increased GP 15%, better relationship than ever

The Bottom Line

The tie isn't automatically evil. Handled badly, it's devastating. Handled well, it's workable. The key is knowledge, relationship, and focusing on what you control.

Most importantly: Stop fighting battles you can't win. Start winning the war through smart tactics.

Your pubco needs successful tenants. Show them how helping you helps them. Then watch support appear.

Frequently Asked Questions

Should I threaten to go MRO to get better terms?

Only if you're genuinely prepared to follow through. Empty threats destroy relationships. Better to present a business case showing how helping you succeed helps them. Most pubcos will negotiate rather than lose a good tenant to MRO.

What if my BDM won't help?

Document everything, then escalate professionally. Email their manager with specific requests and evidence. But first, ensure you're approaching correctly - many BDMs want to help but need business justification to get approval.

Is going free of tie always better?

No. Calculate total cost including rent, lost support, capital requirements, and relationship value. Many successful pubs thrive within ties. Free of tie means free of support too. Do the maths honestly before deciding.

Can I buy some products outside the tie?

Check your specific agreement. Guest ales, wines, spirits, soft drinks may have flexibility. Never breach your tie - it's grounds for forfeiture. But maximize every legal opportunity for untied products.