'Beer ties' protect pubs and red tape will lead to more closures The "beer tie" is at the heart of objections to the sector. Put simply, the tie is a promise by the tenant to buy beer through a pub company so the company can benefit from bulk purchasing. In turn, we give them the chance to set up a new business with no capital investment and a lower market rent.Without us, a new pub operator would find it almost impossible to set up a new business, given the difficulty of borrowing from the banks. Landlords also benefit from our advice and support. However, critics argue the tie allows pub companies to lock unwitting landlords into contracts that force them to pay rents which go only one way and to buy a small range of beers at an excessive mark-up. At Punch, we have a balanced relationship with our tenants: we give them an option of buying beer at market prices but without a subsidised rent; tenants no longer face upward-only rent reviews. There has been a marked decline in complaints; the performance of our pubs is stabilising and, in many cases, improving. Vince Cable's proposals would create a state-backed quango with the power to interfere with long-standing contracts. We are concerned he may have made up his mind to abolish the tie, which, we believe, has protected pubs, not accelerated their decline. The Government has previously acknowledged that, since 2008, free-of-tie pubs have been more likely than tied pubs to close so we cannot understand why the Business Secretary is keen to further expose pubs to this tough environment. It would be a great pity to see government red tape lead to more closures. For the sake of the Great British Pub, we hope more sober heads will prevail. Stephen Billingham is chairman of Punch Taverns