A end of a 400-year-old rule that means British pubs can now pick and choose their ales, won't lead to cheaper beer, the boss of one of Britain's biggest brewers warned.
Currently, anyone wanting to become a pub landlord in the U.K. can rent a premise from the brewery that owns it. Rent and insurance is often below the market rate. In return, publicans must buy beer and other supplies from the owner -- often at a much higher rate than the market.
British lawmakers voted in favour of scrapping the rule Tuesday, a move that would allow pub tenants to buy beer from any supplier if it became law.
While the move has raised hopes of cheaper beers and a revival of the "ol' British boozer", large companies such as Punch Taverns and Enterpirse Inns have attacked the plan and claimed the "beer tie" has helped entrepreneurs do well in the industry.
No cheaper beer
The CEO of one of Britain's biggest brewers Fuller, Smith and Turner said ending the beer tie won't push booze prices down.
"I think it's unlikely to lead to cheaper beer. These tenants that have pubs are going to need to support their pubs by putting more of their own money into pubs," Simon Emeny, told CNBC in a TV interview.