Heineken fined for putting undue pressure on pubs

United Kingdom | Heineken's UK pub business, Star Pubs and Bars, was fined GBP 2 million (EUR 2.2 million) by the pub industry watchdog, after forcing tenants to sell “unreasonable levels” of its own beers and ciders.

An inquiry by the Pubs Code Adjudicator (PCA) found that Star Pubs “seriously and repeatedly” broke rules between 2016 and 2019. In fact, several pubs, which had asked to no longer be tied to Star Pubs, were told nevertheless that 100 percent of their keg beer had to be Heineken brands.

Star Pubs said it was considering an appeal, calling the fine “unwarranted”, the BBC reported.

Star Pubs has an estate of 2,500 pubs, with 1,900 in England and Wales covered by the PCA.

More power to the publicans

The Pubs Code came into force in 2016 after new laws were passed. It covers pub companies owning 500 or more tied pubs in England and Wales. That includes Greene King, Marston’s, Star Pubs, Punch Taverns, Stonegate and Admiral.

The Code demands lawful dealing by landlords (eg Star Pubs) with tied pub tenants, and says that tied tenants should be no worse off than if they were free of the tie.

If pub managers agree to a tied lease, they must agree to sell drinks supplied by their landlords. But they can also arrange their own supplies in exchange for a higher rent. In this case, they must still stock a proportion of their landlord's drinks. However, there are limits on how much the landlord can force them to sell.

Arm-twisting tactics

Up until August 2018, the PCA heard of 96 pub tenants who asked to sell competing brands but were told that 100 percent of their keg beer still had to be Heineken brands.

The PCA said Star Pubs had been given opportunities to improve matters “but intentionally or negligently failed to do so”. Hence the PCA issued a fine.