Tied house

In the United Kingdom, a tied house is a public house required to buy at least some of its beer from a particular brewery or pub company. That is in contrast to a free house, which is able to choose the beers it stocks freely.

A report for the UK government described the tied pub system as "one of the most inter‐woven industrial relationships you can identify in the UK, with multiple streams of payments running in both directions, from the pub tenant to the pubco and vice versa, generally negotiated on a pub‐by‐pub basis."

The pub itself may be owned by the brewery or pub company in question, with the publican renting the pub from the brewery or pub company, termed a tenancy. Alternatively, the brewery may appoint a salaried manager while retaining ownership of the pub; that arrangement is a "managed house". Finally, a publican may finance the purchase of a pub with soft loans (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.

However, the arrangement was sometimes disadvantageous to consumers, such as when a regional brewer tied nearly every pub in an area so that it became very hard to drink anything but its beer. This was a form of monopoly opposed by the Campaign for Real Ale, especially when the brewer forced poor beer onto the market from the lack of competition from better breweries. Some or all drinks were then supplied by the brewery, including spirits and soft drinks, quite often at an uncompetitive price relative to those paid by free houses. From 1989 to 2003, some tied pubs in the UK were legally permitted to stock at least one guest beer from another brewery to give greater choice to drinkers.

In Canada, alcohol laws are the domain of the provinces. Tied houses were eventually banned in all provinces in the aftermath of the repeal of total alcohol prohibition. In the 1980s the concept of the Brew Pub or Microbrewery was introduced to Canada beginning in the Province of British Columbia. Through the 1980s and 1990s this concept expanded to other provinces but was not a return to fully tied houses in the traditional sense.

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Wikipedia