(a) the pub itself may be owned by the brewery in question, with the publican renting the pub from the brewery. This is termed a tenancy.
(b) Alternatively, the brewery may appoint a salaried manager to run the pub it owns, and this form of tie can sometimes be termed a managed house.
(c) a publican may finance the purchase of a pub with a loan (usually a mortgage) from a brewer and be required to buy his beer from it in return.
The traditional advantage of tied houses for breweries was the steadiness of demand they gave them; a tied house would not change its beer supplier suddenly, so the brewer had a consistent market for its beer production.
Conversely, with what is termed a 'Free House, the publican is able to source his stock from wherever he chooses.
From Politics Home we learn that MPs have forced the Government to set up an inquiry into the regulation of large pub companies in an attempt to ease the burden on struggling publicans. In a Commons debate yesterday, Members also called for an industry-wide statutory code of practice, overseen by an independent body. (typical politicians response: set up an independent body, so yet more bureaucrats on the public purse - but I digress). The Independent and the Guardian post articles on this subject, neither of which is complimentary to the government.
It is interesting, on the face of it, that the question of tied houses would appear to be further complicated by the EU 'ruling' which states:
"Under EU rules, businesses:The exact legal position viz-a-viz the EU and the UK I know not, as I know not whether there is any 'derogation' for the UK in this field where public houses are concerned. Perhaps any reader who knows something about this subject may wish to enlighten me.
- may not fix prices or carve up markets amongst themselves.
Needless to say it does raise the question that, other than requiring someone self-employed, which is surely what a publican is, to comply with self-employment regulations and the requirement to pay the required taxes - be that business, personal or vat - what right anyone has, be that government or company, to regulate or impose conditions on how that individual carries on his business?
Thinking out loud, hence just a few thoughts...........