Why “Cheap Rent” might be costing you £35,000 a year.
If you are negotiating a lease, your Business Development Manager (BDM) has probably given you the standard “Partnership Pitch.”
It goes like this:
“Stick with the Tie. We’ll keep your rent low—just £25k! We’ll support you with marketing and repairs. If you go MRO (Market Rent Only), your rent will double and you’ll be on your own.”
It sounds logical. It is also mathematically wrong.
We analyzed the February 2025 Wholesale Price Lists (the ones they don’t show you until after you sign). We ran the numbers. Here is the truth the Pubcos don’t want you to calculate.
The Tie-Breaker Calculator
Is the “Cheap Rent” actually costing you a fortune? Compare your Tied Lease vs. Market Rent Only (MRO) instantly.
Enter Your Numbers
Approx. 300 Barrels/Year
Landlords often double the rent for MRO. We’ve defaulted this to 2x your Tied rent to show the “Worst Case” scenario.
The Verdict
MRO is Cheaper
by £0 / yearEven with a higher rent, buying beer at market prices saves you a fortune.
Hidden “Wet Rent”
£0
Extra paid per year just for beer
5-Year Saving
£0
Total profit gained over lease term
Need the official numbers?
Don’t rely on back-of-napkin math. Get a professional-grade Shadow Surveyor report.
The Truth Pubcos Don’t Want You To Calculate
If you are negotiating a lease, your Business Development Manager (BDM) has probably given you the standard “Partnership Pitch.” It sounds logical, but mathematically, it’s often a trap.
The £100 “Keg Tax”
The “Beer Tie” is exactly like buying a cheap inkjet printer. The printer (the Rent) is cheap, but the ink (the Beer) costs a fortune.
Real World Price Check (Feb 2025)
- Free-of-Tie Price (Local Wholesaler) £120.00
- Pubco Tied List Price £226.56
- The “Hidden Rent” per Keg -£106.56
This isn’t just a “markup.” This is “Wet Rent.” It fluctuates with your success. The harder you work, the more you pay.
The “Break-Even” Myth
Landlords will often double the rent if you ask for MRO (Market Rent Only) to scare you off. Use the calculator above to find your “Crossover Point.”
As shown in the tool, even with a massive rent hike, the savings on beer usually outweigh the rent increase significantly. Over a 5-year lease, staying Tied can cost you nearly £400,000 in lost profit.
The “Investment Exception” Trap
Regulation 55 Warning
This is the dirty secret finding its way into leases right now.
How it works: The Pubco offers to spend £35,000 on a new patio for you. You think, “Great! Free money!”
The Trap: By accepting this investment, you legally waive your right to MRO for up to 7 years. You just sold your freedom for a patio. That patio will cost you hundreds of thousands in inflated beer prices over the lease term.
Never accept a Pubco investment without running the numbers first.
Data is Your Only Weapon
The Pubco has an army of surveyors and data analysts. If you go into that meeting with just “passion,” you will lose. You need The Math.
Start Your Free Lease Scan NowLooking to boost your Sunday trade? Check out our Sunday Roast Forecaster.
1. The £100 “Keg Tax”
The “Beer Tie” is exactly like buying a cheap inkjet printer. The printer (the Rent) is cheap, but the ink (the Beer) costs a fortune.
Let’s look at the single most common product in a UK pub: a 50L keg of standard 4% Lager (e.g., Carling, Fosters, or Amstel).
- Free-of-Tie Price: If you call a local independent wholesaler today, you can buy this keg for £115 – £125.
- The Tied Price: According to the Major Pubco price lists effective Feb 1st, 2025, the standard “Wholesale List Price” for this keg is now £226.56.
The Difference: You are paying £100+ extra for every single keg.
This isn’t a “markup.” This is “Wet Rent.” It is hidden rent that fluctuates with your success. The harder you work, the more “Wet Rent” you pay.
2. The “Break-Even” Myth
To know if you should choose the Tie or MRO, you need to find your Crossover Point.
Let’s look at a real-world example of a standard community pub selling 20 kegs a week (approx 300 barrels/year).
Scenario A: The Tied Lease
- Rent: £25,000
- Keg Tax: £100 loss x 1,040 kegs (annual) = £104,000 (Hidden Cost)
- Total Real Cost: £129,000
Scenario B: The MRO (Free of Tie) Lease
- Rent: £50,000 (The landlord doubles it to scare you).
- Keg Tax: £0 (You buy at market rate).
- Total Real Cost: £50,000
The Verdict: Even with the “Scary Rent Hike,” the MRO option saves you £79,000 per year. Over a 5-year lease, staying Tied costs you nearly £400,000 in lost profit.
3. The “Investment Exception” Trap (Regulation 55)
This is the dirty secret finding its way into leases right now.
Under the Pubs Code Regulations, you have a legal right to request MRO. Unless… you sign an “Investment Agreement.”
How it works:
- The Pubco offers to spend £35,000 on a new patio for you.
- You think: “Great! Free money!”
- The Trap: By accepting this investment, you legally waive your right to MRO for up to 7 years.
You just sold your freedom for a patio. That patio will cost you hundreds of thousands in inflated beer prices over the lease term. Never accept a Pubco investment without running the numbers first.
[Interactive Tool] The Tie-Breaker Calculator
Stop guessing. Enter your specific Rent and Volume below to see if you are in the “Kill Zone.”
(Note: This is where the widget appears)
Summary: Data is Your Only Weapon
The Pubco has an army of surveyors and data analysts. They price the rent to take as much profit as possible without bankrupting you.
If you go into that meeting with just “passion,” you will lose. You need to walk in with The Math.
👉 [Start Your Free Lease Scan Now]