The call has been made for a mandatory free-of-tie option to be offered to pubco tenants. I can tell you what will happen if that is brought in: large numbers of the best currently tenanted/leased pubs will be turned into managed houses, and those pubs not suitable for a managed operation that look as if they will not bring in an adequate return to their pubco owner as free-of-tie operations will be sold to the highest bidder – likely to be Tesco, Sainsbury’s or Morrisons...If the tie was completely abolished, then what incentive would there be for a pubco to lease out a tenanted pub without any “wet rent”? It would become a pure property operation, and it might as well rent the premises out as a supermarket or a nail parlour. The pub market would polarise between high-profile, heavily-invested managed houses, and a long tail of often struggling, tatty and underinvested free houses. If a free house did well, it would be attractive to the managed house operators; if it didn’t, it would be even more vulnerable to conversion to alternative use than pub company pubs are at present. A few successful independent free houses with committed owners would thrive, as they do at present, but that would be far from general.
...There’s a good argument for saying that if it wasn’t for the pubco model and the support it provides licensees, even more pubs would have gone under in Britain than have so far. As one of the longest-lasting and most-successful pubco chief executives, having outlasted at the wicket most or all of his rivals from the early 1990s, Ted Tuppen can walk away from the crease, pulling off his batting gloves, with plenty of satisfaction.
As I said in the comments, the anti-pubco campaigners never come up with any realistic alternative ownership structure for the industry. To imagine all pubs as stand-alone free-trade operations is pie-in-the-sky, to see them as council-owned “community assets” even more so. If property owners do not stand to gain from the business success of their properties, then what is in it for them?