Pub Stocks Are Getting Destroyed After A Rebellion Against Higher Prices For Beer | ||
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A government rebellion last night just broke a system that's governed British pubs for centuries, and shares in the industry are tanking. A rebellion against the government yesterday that passed by just 15 votes means that pub tenants currently tied to a supplier would be able to negotiate a market rent and buy their beer on the open market. The vote has effectively ended the "beer tie", a process by which tenants of pubs owned by the big pub companies (PubCos) are charged a higher-than-market price for their beer, in exchange for benefits like cheaper rents and access to the company's cheaper supply chain. The rebellion has sent a massive shockwave through listed pub companies this morning: Punch Taverns and Enterprise Inns, the two largest floated PubCos, have seen their shares drop by more than 9% and more than 11% respectively. The Federation of Small Businesses cheered the move, but anti-prohibition campaigner Chris Snowdon is less impressed, arguing that campaigners and pub tenants have just shot themselves in the foot:
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