Heineken UK’s pub business, Star Pubs & Bars, has been fined £2 million by the industry watchdog after forcing tenants to sell “unreasonable levels” of its alcohol.
An investigation by Pubs Code Adjudicator (PCA), Fiona Dickie, found that the business had “seriously and repeatedly” breached the code for three years.
The investigation covered the period from 21 July 2016, when the Pubs Code came into effect, until 10 July 2019. During this time, the PCA found that Star had persistently forced its tenants to sell “unreasonable levels” of the company’s beers and ciders after requesting to no longer be tied to Heineken.
Up to August 2018, the PCA found that 96 tenants who requested a free-of-tie option were told that 100% of the keg beer they sold had to be Heineken brands.
This was contrary to the legal requirement that stocking terms should not prohibit a publican selling competitor brands. After several arbitration rulings by the PCA, Heineken reportedly switched to a tiered approach as to the amount of own brands to be stocked and specifying ‘must stock’ brands. However, this policy was still not compliant in many cases.
According to the Pubs Code, a free-of-tie option enables pubs to sell different brands as well as a proportion of their landlord’s drinks, but there are limits on how much they are forced to sell.
Additionally, Dickie also found that Star had called for its own code compliance officer to “to ensure the Code is interpreted to the commercial benefit of Heineken UK”.
In the report of the investigation, the PCA described Star as a “repeat offender” and said the company had been given opportunities to set itself on a compliant path “but intentionally or negligently failed to do so”.
In response to the fine, Lawson Mountstevens, managing director at Star Pubs & Bars, said: “There are many aspects of the report that we fundamentally disagree with and we are actively considering an appeal.
“We are dedicated to the Pubs Code in both word and spirit, and do not believe the outcome of this investigation accurately reflects the culture of our business or the good working relationship we have with the vast majority of our licensees.”
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