Pub Stocks Are Getting Destroyed After A Rebellion Against Higher Prices For Beer
A rebellion against the government yesterday that passed by just 15 votes means that pub tenants currently tied to a supplier would be able to negotiate a market rent and buy their beer on the open market.
The vote has effectively ended the "beer tie", a process by which tenants of pubs owned by the big pub companies (PubCos) are charged a higher-than-market price for their beer, in exchange for benefits like cheaper rents and access to the company's cheaper supply chain.
The rebellion has sent a massive shockwave through listed pub companies this morning: Punch Taverns and Enterprise Inns, the two largest floated PubCos, have seen their shares drop by more than 9% and more than 11% respectively.
The Federation of Small Businesses cheered the move, but anti-prohibition campaigner Chris Snowdon is less impressed, arguing that campaigners and pub tenants have just shot themselves in the foot: