Tied houses and free houses in Britain

After the development of the large London Porter breweries in the 18th century , the trend grew for pubs to become tied houses which could only sell beer from one brewery (a pub not tied in this way was called a Free house ). The usual arrangement for a tied house was that the pub was owned by the brewery but rented out to a private individual (landlord) who ran it as a separate business (even though contracted to buy the beer from the brewery). A growing trend in the late 20th century was for the brewery to run their pubs directly, employing a salaried manager (who perhaps could make extra money by commission, or by selling food).

Most such breweries, such as the regional breweries Shepherd Neame in Kent and Youngs in London, control hundreds of pubs in a particular region of the UK, whilst a few, such as Greene King , are spread nationally. The landlord of a tied pub may be an employee of the brewery-in which case he would be a manager of a managed house, or a self-employed tenant who has entered into a lease agreement with a brewery, a condition of which is the legal obligation (trade tie) only to purchase that brewery's beer. This tied agreement provides tenants with trade premises at a below market rent providing people with a low-cost entry into self-employment. The beer selection is mainly limited to beers brewed by that particular company . A Supply of Beer law , passed in 1989, was aimed at getting tied houses to offer at least one alternative beer, known as a guest beer , from another brewery. This law has now been repealed but while in force it dramatically altered the industry.

The period since the 1980s saw many breweries absorbed by, or becoming by take-overs, larger companies in the food, hotel or property sectors. The low returns of a pub-owning business led to many breweries selling their pub estates, especially those in cities, often to a new generation of small chains, many of which have now grown considerably and have a national presence. Other Pub chains , such as All Bar One and Slug and Lettuce (pub chain) offer youth-oriented atmospheres, often in premises larger than traditional pubs.

A free house is a pub that is free of the control of any one particular brewery. "Free" in this context does not necessarily mean "independent", and the view that "free house" on a pub sign is a guarantee of a quality, range or type of beer available is a mistake. Many free houses are not independent family businesses but are owned by large pub companies. In fact, these days there are very few truly free houses, either because a private pub owner has had to come to a financial arrangement with a brewer or other company in order to fund the purchase of the pub, or simply because the pub is owned by one of the large pub chains and pub companies (PubCos) which have sprung up in recent years. Some chains have rather uniform pubs and products, some allow managers some freedom. Wetherspoons , one of the largest pub chains does sell large amounts of a wide variety of real ale at low prices - but its pubs are not specifically "real ale pubs", being in the city centre to attract the Saturday night crowds and so also selling large quantities of alcopops and big-brand lager to large groups of young people.