Merger activity has accelerated hand-in-hand with globalisation, driven by the search for increased economies of scale and larger markets. While demand for beer in the UK and Europe has remained fairly static, demand in China and the rest of Asia has accelerated. For example, during 2011, sales of beer by volume by AB-InBev grew by just 0.4% in Western Europe compared with an 11% growth in beer volumes in China. In contrast, sales by volume to Easter Europe actually fell by around 5%. The preferred marketing strategy is to focus on non-price competition and developing premium brands which command a higher price. Globally, this means targeting the growing middle classes in China and India who prepared to spend a little bit more on premium brands. The decision confirms that under EU law the tie, along with many other similar business agreements, remains a recognised and legitimate business model, which fully complies with EU competition rules. Leading c onsumer group CAMRA has called on the Competition and Markets Authority to take the lead and investigate a proposed merger which could reduce the choice of beers available to pubgoers. The vote to end the tie is supported by bodies such as CAMRA and the Federation of Small Businesses. They argue that removing the tie will save many pubs from closure and bring greater competition to the market. Brewers been forced to sell-off some of their pubs as a condition of being allowed to merge, hence enabling new firms to enter the market. For example, in 2000 the UK’s Competition Commission forced Interbrew to dispose of some 75% of its pubs.

The new appeal to Chief Executive, Dr Andrea Coscelli , follows a string of correspondence about the proposed joint venture between Carlsberg and Marston’s that CAMRA believes could have significant anti-competitive effects on the UK beer and pub market. David Law and Simon Clarke run the Eagle Ale House, near London’s Clapham Common, and rent the premises from Enterprise Inns, the subject of more than three times as many MRO applications as any other chain. According to dozens of pub landlords around the country, already wrestling with the rapid decline in the number of Britain’s pubs, the reality has been very different. The small business minister Kelly Tolhurst recently announced the first statutory review of the pubs code and the way it is arbitrated, via the pubs code adjudicator.The BPC chair, Greg Mulholland, who pushed the MRO option through parliament as a Liberal Democrat MP, said that in its current form “tenants do not have the rights they were promised by ministers”. He and Clarke claim that when they applied for the MRO option, Enterprise tried to attach unreasonable conditions to their new lease that made it unworkable. They were left facing the prospect of spending huge sums on legal advice and hours of time on protracted negotiations. They also felt that the supposedly independent assessors who set the market rent were anything but. Like most landlords who seek an MRO option, Pybus never got his. Instead, the former British debating championships runner-up thrashed out a deal face to face with his landlord, the pubco Punch Taverns. His case was helped by publicity whipped up by the dispute, not to mention romantic regard for the Blue Bell, a 200-year-old pub whose interior has not changed since 1903 and where York City football club was formed. They say the tied option does not make financial sense for them and the pub would be more profitable – as well as offering cheaper and better beer – if they were free of the tie.

Their view is that the tie forces tenants to pay unnecessarily high prices for their beer which according to CAMRA can be 60 – 70% more than non-tied pubs. This impacts on their profitability and ultimately results in too many pub closures.The new rules have kept the same threshold of market share - 30% - under which the exemptions will apply.

I certainly don’t have any sympathy for them,” says Marsden. “I hope that many publicans are able to buy their premises, I’d certainly like to buy the Prince.” Is the end of the beer tie good or bad? The pub industry is complex and there’s no doubt that unscrupulous pub operators may have abused the system. However, there are many operators who invest significantly in their pubs and who recognise that supporting successful tenants equates to successful pub companies. However, in the UK around 50% of pubs are still tied to major brewers for their supply and, according to research by CAMRA, the ‘beer ties’ adds around 6-7% to pub prices. But she will already be in little doubt as to how many publicans view it. Pub tenants and MPs have been “duped and betrayed”, according to the British Pub Confederation, which said the MRO was little more than a myth. The pub companies have borrowed heavily to expand their portfolios and since the credit crunch they’ve been forced by the banks into massive sell-offs. Some of these pubs have become free houses, but many others have been converted into other uses such as supermarkets.Challenges arising from supermarket pricing, pub regulation and punitive leases all have a cost. And that cost is a dire selection of the cheapest brands of beer, "ready" meals, poorly trained staff and management, delayed refurbishment, increasingly desperate price promotions and so on. In other words, a disheartening experience for the customer creating a spiral of decline, leading sooner or later to yet another closure statistic. What is it we stand to lose? Independent Family Brewers of Britain chairman Paul Wells said: "It's great news because it does validate the business model that the family brewers have been championing for a long time. As such, Marsden is delighted with the vote. “It’s basically fantastic,” he enthuses. “The industry has been dominated by these pub companies and over the past 20 years they have extracted a massive amount of profit, but have done very little of value.” The tie system also allows people to become pub tenants with smaller personal investments. This helps to make the sector more accessible widening the pool of potential applicants.

While there have been some challenges with parts of the implementation of the code for all involved, the BBPA and the companies covered by the code continue to work closely with the adjudicator and other stakeholders to resolve these,” the chief executive, Brigid Simmonds, said. The ‘tie’ system refers to the structure of businesses where pub companies buy a pub and then lease it to a tenant landlord who pays rent to the pub company. The agreement also ties the tenant into buying their beer from the same parent company. Proponents of the bill argue it ends an archaic system and will make pubs more profitable. Opponents including the government argue that it will result in pub closures and job losses. Community Pubs, aka the traditional boozer, (as distinct from metropolitan or "country" gastropubs) are vital meeting places for the forgotten agricultural villages, market towns and down-at-heel districts of our cities. Yes, they may be entropic hubs of indolence and indulgence. But where's the harm in that? Aren't we hard-pressed enough? What's gone so dreadfully wrong?Mark Robson is founder of Red Mist Leisure, which runs five pubs in the South East of England. He moved into the pub business in 2004 initially operating tied leases via Punch Taverns, but managed to acquire them and now runs them as free houses. He gave the new amendment a cautious welcome. “I am very, very anti-beer tie so if it goes then that’s a good thing. However, usually when the government gets involved in the pub industry they make things worse rather than better. I am little bit sceptical that it will go through as the beer tie has been around for 400 years.” Others argue that the tie remains a key part of the industry that works well for pub companies who have ambitious tenants. One of the key arguments against the change is that the tie is about more than the rent and beer. Pubs in less affluent areas of Britain are in danger of becoming extinct. They have been priced out of the market by rapacious landlords and the supermarkets. If we don't look sharp we are in danger of losing them forever.