Heineken’s pubs arm, Star Pubs & Bars, has been put under investigation by the UK watchdog over suspicions it forced tenants on rent-only contracts to buy Heineken beers.
Paul Newby, the Pubs Code Adjudicator, said that he had “reasonable grounds” to suspect that between 2016 and 2019 Star Pubs had been going beyond the limits set out in the pubs code for how much of the brewer’s beer a pub was obliged to stock.
Heineken, the world’s second largest brewer, tripled the size of its pubs arm to 2,700 pubs in 2017 with the £403m acquisition of Star parent Punch Taverns.
It announced last year that it would invest £44m in Star Pubs, a move that the UK business secretary Greg Clark hailed as a “vote of confidence” in Britain ahead of Brexit.
Under a ‘tied’ lease, tenants had been required to buy a certain proportion of beer from their landlords. Pub tenants have often complained that the prices of the tied beers and ciders were often well above rates on the open market.
But since the establishment of the pubs code in 2016, tenants of pubs leased from large pub companies or brewing businesses have been entitled to apply for ‘market rent-only’ contracts.
Mr Newby said that he and his deputy, Fiona Dickie, “have decided to launch this investigation to understand the extent to which the Pubs Code may have been broken and the potential impact on Star tenants.”
They added that they believed that the particular contractual terms they would look into included whether Heineken had required pub tenants to only supply Heineken products or brands in which Heineken had a commercial interest, and whether the brewing company had sought to influence the retail prices of the beers.
The addition of the Punch Taverns estate makes Heineken the third largest pub owner in the UK after Greene King and Enterprise Inns.
A spokesperson for Star Pubs & Bars said that the legislation made clear that Heineken had a right to ensure that pubs it owned sold its beer and cider. “While the principle of the brewers stocking requirement is clear, this part of the new legislation is complex and not clearly defined in the pubs code. We therefore hope that this investigation will provide the certainty and clarity that we have sought repeatedly over the past three years,” they added.
