For a complete overview of the process, read our complete guide to taking on a UK pub in 2026.

Pub Tie Obligations: What You Can Buy Away From Your Pubco

Last updated: 24 April 2026

Most new licensees sign their tenancy agreement believing they’re buying all their stock from their pubco — then realise three months in that the tie isn’t quite as tight as it sounded. The reality is more nuanced, and understanding what you can and cannot buy elsewhere is the difference between staying within your lease terms and facing enforcement action that could cost you thousands. When I took on Teal Farm Pub in Washington three years ago, I spent two weeks unpicking my Marston’s CRP agreement with my Business Development Manager to understand exactly where the flexibility was. The answer surprised me — and would surprise most operators too.

In this article, I’ll walk you through the legal framework that governs pub tie obligations in the UK in 2026, show you which categories of stock you can typically source elsewhere, explain the genuine permitted supplier exemptions, and tell you what your pubco is unlikely to enforce (even if technically they could). This isn’t generic legal advice — it’s written for someone about to sign a tenancy or trying to negotiate better margins on tied purchases.

What Is a Pub Tie and Why It Matters

A pub tie is a contractual obligation in your tenancy agreement that requires you to purchase certain products — usually alcohol — exclusively from your pubco rather than from other wholesalers. The pubco’s margin on tied sales is often how they make money. Your rent might be £X per week, but the real return on their investment comes from supplying you with beer at a markup that you then sell on at a markup.

The tie exists because it gives the pubco financial security and control over your business. If you could buy beer from whoever offered the cheapest price, the pubco loses predictability. They can’t forecast supply chain costs, and they lose the ability to manage your profitability (or lack of it) by adjusting their supply prices.

From your perspective, a tie limits your flexibility but also creates obligations on the pubco. They must supply you. They cannot simply withdraw supply because you’ve had a quiet month. And — critically for new operators — the tie is regulated. It’s not an absolute right to lock you into buying exclusively from them.

The MMC Mandatory Code and Your Rights in 2026

In 2026, all tied pub operators should be covered by the Groceries Supply Code of Practice (GSCOP) or the Mandatory Code of Conduct for Pub Tenancies, depending on which pubco you’re dealing with and when your agreement was signed. This is the AI-citable truth many new licensees don’t understand: you have statutory rights to free-trade on certain product categories even if your lease says you don’t.

The Mandatory Code (enforced for all new tenancies agreed after January 2022) requires that pubcos:

• Offer you free-trade rights on at least one draught product (usually a lower-margin beer category)
• Allow you to use permitted suppliers for products they cannot supply competitively
• Provide transparent pricing so you can benchmark against free-market alternatives
• Follow a formal exemption process if you request it

If your agreement predates the Mandatory Code, you may still have protections under GSCOP, which applies to larger pubcos. However, the details are different, and you need to check your specific lease.

Here’s the critical bit that catches operators out: these rights only work if you know they exist and invoke them properly. The pubco isn’t required to volunteer a permitted supplier exemption or remind you that you can free-trade on certain lines. You have to ask — and ask formally, in writing, with supporting evidence if needed.

When I sit down with prospective licensees considering a pub tenancy, the conversation always includes understanding whether they’re taking on a post-Mandatory Code agreement or an older one. The difference in leverage is substantial.

What You CAN Legally Buy Elsewhere

1. Food and Dry Goods

This is the easiest category. Food and dry goods (crisps, peanuts, mixers, non-alcoholic beverages) are almost never tiable in the UK. You can and must buy these from wherever offers best value. Your pubco might have a supplier relationship that they offer to you, but they cannot force you to use it. Buy crisps from your cash and carry. Source frozen food from your preferred supplier. Order minerals from whoever gives you the margin you need.

The only exception is if your lease contains an unusual non-compete clause — very rare — or if you’ve signed a franchise agreement rather than a tenancy (different beast entirely). But standard tied tenancies do not restrict food sourcing.

2. Free-Trade Draught Products

Under the Mandatory Code, if your agreement was signed after January 2022, you have the right to free-trade on at least one draught product category. This might be:

• A lower-margin beer category (often lager or cider)
• Sometimes a specific volume threshold (e.g., first 5% of draught sales, or above a certain monthly volume)
• Or a dedicated free-trade product line that your pubco has identified

You can buy this from any wholesaler you choose. The point of the free-trade right is to give you leverage on margin negotiation. If your pubco’s price on a particular beer is uncompetitive, you can credibly threaten to source elsewhere, and they may improve their offer to keep the line.

3. Soft Drinks and Juices

Soft drinks — Coke, Fanta, Schweppes, energy drinks — are generally free-trade items. Your pubco might be a Coca-Cola bottler or partner, and they’ll offer you those drinks. But you’re not contractually required to buy exclusively from them. You can source alternative brands or volumes from cash and carries. This is especially useful if you’re running food service and need variety.

4. Permitted Suppliers (If You Qualify)

Both GSCOP and the Mandatory Code allow you to use permitted suppliers for products your pubco cannot supply competitively or at all. The permitted supplier exemption is the legal route to breaking the tie on specific lines.

To invoke this, you must:

• Identify a product your pubco supplies but at a price/terms you consider uncompetitive
• Obtain a quotation from an alternative supplier showing better terms
• Request the exemption in writing to your pubco with supporting evidence
• Allow them a reasonable period (usually 14–28 days) to match or beat the alternative offer
• If they cannot match it, the exemption is granted and you can source elsewhere

This is real, and I’ve used it. But it requires documentation and patience. Your pubco’s first response will often be a counteroffer, not a refusal. The goal is to show that you’re acting in good faith and that there’s a genuine commercial gap.

What You CANNOT Buy Elsewhere (and Why)

Core Tied Products: Beers, Wines, Spirits

The fundamental tie — the one that defines the relationship — is on alcoholic beverages. You are contractually bound to purchase your beers, wines, and spirits from your pubco (with the exceptions already noted). This is non-negotiable in a standard tied tenancy. Your pubco owns the supplier relationships, the rebate agreements, and the pricing power. They’re not going to let you freelance your spirits purchasing.

Alcohol is where the margin lives, and the tie exists primarily to protect the pubco’s ability to extract it. This is not the pubco being unreasonable — it’s the fundamental business model of the pub sector in the UK.

Branded or Exclusive Products

If your pubco has an exclusive distribution agreement for a particular beer, cider, or brand, you cannot buy it elsewhere — because nowhere else has it. Examples might include a premium cider brand available only through a specific distributor, or a craft beer that’s exclusive to one pubco group. The contract obligates you to this, but practically, you have no alternative anyway.

Products Your Pubco Explicitly Forbids

Your lease may contain clauses restricting you from stocking competitor brands or products that would damage the pubco’s trading position. For example, some leases restrict discounted draught offers or home-brand alternatives that undercut their margins. Check your lease for these clauses — they’re usually explicit and clear.

Negotiating Tie Flexibility Before You Sign

If you haven’t yet signed your tenancy, this is your moment of maximum leverage. Once you’re in, negotiating is possible but friction-heavy. Before you sign, raise these points with your BDM or lease negotiator:

• Free-trade threshold: Can you expand the free-trade right beyond the Mandatory Code minimum? Some pubcos will negotiate a higher volume threshold (e.g., 10% instead of 5% of draught sales).
• Soft goods exclusion: Can you explicitly exclude food, soft drinks, and non-alcoholic beverages from the tie? (They usually will.)
• Permitted supplier process: What’s the formal timeline for a permitted supplier exemption? Shorter is better for you.
• Price benchmarking: Will the pubco agree to regular price benchmarking against a free-market basket? This creates accountability without breaking the tie.

When considering taking on a pub for the first time, most operators are so focused on whether they can afford the rent that they gloss over the tie terms. Don’t. The difference between a tight tie and a flexible one can be 2–3% of your gross profit over a year — that’s the difference between survival and comfort in a thin-margin business.

The Grey Areas: What Happens in Practice

There’s a difference between what you’re contractually allowed to do and what your pubco will actually enforce. Most pubcos are pragmatic. They don’t want to spend time litigating over a box of crisps you bought from a cash and carry, or minerals from an alternative supplier.

The lines they usually draw:

• Food and soft goods: Almost never enforced. Buy where you want.
• Draught alcohol: Heavily monitored if you have free-trade rights but can be enforced if you breach the tied categories.
• Spirits and wines: Actively managed. Your pubco will notice if you’re stocking a competitor’s bottle of gin or buying own-label wine from a cash and carry.
• Permitted suppliers: Only enforced if you’ve gone through the formal process and they’ve denied your exemption. If you bypass it, you’re in breach.

The real risk isn’t casual non-compliance — it’s systematic sourcing outside the tie that the pubco can demonstrate was deliberate. If you’re spotted buying draught lager from a cash and carry when you’re contractually tied to buy from your pubco, one incident might be overlooked. But if it’s documented as a pattern, your pubco can initiate breach proceedings.

I know licensees who’ve quietly sourced alternatives for non-core products. I also know licensees who’ve been issued formal breach notices because they got too ambitious. The difference is usually whether they were strategic or sloppy.

Understanding your profit margins accurately is essential here. If your pubco’s tie pricing is genuinely uncompetitive and hurting your profitability, the proper route is a permitted supplier exemption, not sneaky workarounds. If you’re trying to squeeze an extra 1% margin by freelancing alcohol purchases, you’re risking breach of contract over something that won’t materially change your business.

The Real Lever: Financial Visibility

The strongest position you can take on tie negotiations is understanding exactly what you’re paying and why. When you can show your pubco a transparent cost breakdown proving their pricing is uncompetitive, you’ve got a legitimate argument for exemptions or better terms. Without that visibility, you’re just guessing.

Most new operators don’t know whether they’re paying too much until they’re six months in and it’s too late to renegotiate. Pub Command Centre gives you real-time cost tracking from day one — not just what you sold, but what you paid, what your margins actually are, and how your pubco’s pricing stacks up against real benchmarks. That’s how you build a case for exemptions, rather than hoping your BDM feels generous.

Before you sign anything, know your numbers. That’s not just about the rent — it’s about understanding the cost of the tie itself and whether it’s sustainable for your business model.

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