What is a free house?

The short answer

A free house is a pub that is under no obligation to buy its beer from a particular supplier. That is the whole definition, and it is entirely negative: the phrase exists only because for most of the last two centuries the majority of British pubs were the opposite, and being free of that arrangement was worth painting on the wall.

The opposite is a tied house — a pub required to buy at least some of its beer from a named brewery or pub-owning company. The tie is a commercial arrangement rather than a licensing category, so “free house” appears on no licence, no register and no listing entry. It is a claim made by the pub about its own supply contracts, and a reader has no way of auditing it from the pavement.

Three ways to tie a pub

The tie takes three standard forms, and the differences matter to the person behind the bar far more than to the person in front of it.

• Tenancy. The brewery or pub company owns the freehold and the tenant rents it, usually paying a rent set below the open-market level in exchange for buying beer at above wholesale prices. The discount and the surcharge are two halves of the same deal.
• Managed house. The owner keeps the pub and employs a salaried manager. There is no tenant to tie: the whole business is the brewery’s.
• Soft loan. The publican owns the pub outright but has borrowed from a brewer on cheap terms, and the loan carries an obligation to stock that brewer’s beer. This is the arrangement that most often lurks behind a sign reading “free house”. The building is genuinely free; the beer engine is not.

A UK government report quoted in the standard account describes the result as “one of the most inter-woven industrial relationships you can identify in the UK, with multiple streams of payments running in both directions.”

How Britain got tied in the first place

For the first three centuries of English licensing there was nothing to be free of. Under the Ale Houses Act of 1551–52, an alehouse keeper was licensed by justices of the peace and generally brewed on the premises; the beer came from the back room, so no supply relationship existed to control.

The change begins with the Beerhouse Act 1830, one of the great pieces of accidental social engineering. Parliament, alarmed by gin, decided the answer was more beer, and allowed any ratepayer to brew and sell beer, ale and porter from home on payment of two guineas a year — with no beer duty and no need to go before the magistrates. The response was overwhelming. By 1841 some 45,500 licences had been issued, and the price of beer had roughly halved by 1838. In Manchester and Salford the number of breweries rose from 27 in 1827 to 75 by 1873.

That flood of small outlets was exactly the raw material a consolidating brewing industry needed. Over the following century brewers bought up licensed premises to guarantee themselves somewhere to sell, and by the late twentieth century the six largest brewing groups between them controlled roughly 75% of the British beer market — a level of concentration the Monopolies and Mergers Commission described as a complex monopoly.

1989: the Beer Orders

The intervention that followed is the single most consequential thing ever done to the British pub, and almost nobody outside the trade remembers it.

The Commission’s inquiry recommended that brewery-owned tied estates be capped at 2,000 pubs. The resulting Supply of Beer (Tied Estate) Order 1989, universally called the Beer Orders, did three things. It freed publicans to buy non-beer drinks — wines, spirits, soft drinks — from any supplier they liked. It gave tenants of the big six the right to stock at least one cask guest beer from outside the tie. And it brought pub tenants under the protection of the Landlord and Tenant Act.

The guest-beer right is the part drinkers noticed, and it ran from 1989 until the orders were revoked on 17 January 2003. Its effect on the beer available in an ordinary tied pub was immediate and enormous, and a great deal of what became the British small-brewery revival was built on that single clause.

What the orders did not do was create a nation of free houses. Faced with a cap on the number of pubs they could own, the big brewers largely chose to stop owning pubs rather than to stop brewing. They sold their estates wholesale, and the buyers were a new kind of company that brewed nothing at all: the pubcos. By the time the orders were revoked, an industry dominated by brewer-owned chains had become an industry dominated by large independent pub-owning groups, and the tie had survived the reform that was meant to loosen it.

The Pubs Code, and the market rent only option

The pubco era produced two decades of complaint about rents and beer prices, and eventually a second statutory intervention. Under the Small Business, Enterprise and Employment Act 2015, the Pubs Code etc. Regulations 2016 were passed on 14 June 2016 and came into force on 21 July 2016, with a Pubs Code Adjudicator appointed that March.

The Code applies only to pub-owning businesses with 500 or more tied pubs in England and Wales, so it reaches the largest companies and no one else. Its central provision is the market rent only option, or MRO: at defined trigger points — a rent review, a lease renewal, an inflation-beating rent increase, or a significant rise in the price of tied products — a tied tenant can require the option of a free-of-tie rent, ending the obligation to buy from the landlord. In effect, the law now offers some tied publicans a route to becoming a free house without moving.

So what does “free house” mean on a sign?

Less than it appears, and more than nothing.

It is not a legal designation and nobody checks it. It usually means the licensee owns or leases the premises without a brewery tie, and it may still coexist with a supply agreement or a discount loan. Some of the pubs that display it most proudly are doing so as a statement of independence rather than as a technical description, and the phrase has been used in that spirit since long before the Beer Orders.

Two of the pubs in this collection make it central to their identity. The Royal Standard of England at Forty Green in Buckinghamshire bills itself as the country’s oldest free house, in a Tudor building whose interior CAMRA rates as nationally important; it revived the strong ale Owd Rodger, which is precisely the sort of thing a tied house could not do. The Bush Inn at Morwenstow, on the Cornish clifftops, describes itself as a thirteenth-century free house. The Clachan Inn at Drymen is a family-run free house at the start of the Rob Roy Way, and the Fox at Corfe Castle a Purbeck-stone free house looking towards the ruined keep.

Why the tie matters to a pub’s history

Three reasons, all of which come up constantly on this site.

First, what is on the bar tells you nothing about the age of the building. A pub can be Grade I listed and owned by a national brewer; another can be a 1970s conversion selling eight cask ales. The beer range is a fact about the supply contract signed last year.

Second, the tie has preserved as much as it has flattened. The reason some of the best historic interiors in Britain survive is that a brewery with a large estate had no commercial reason to modernise a small back-street pub. Samuel Smith’s ownership of the Cittie of Yorke in Holborn has left its extraordinary 1920s hall alone; the National Trust holds the George Inn in Southwark and the Fleece at Bretforton, which is a different kind of tie with the same conserving effect.

Third, freedom of supply is why brewery taps and house beers exist at all. A pub that brews its own, like the Lord Nelson in Sydney or Schlenkerla in Bamberg, sits at the far end of the same spectrum: not free of a tie, but tied to itself. There is a list of them under brewery taps.

If you want the longer view of how the licensing that made all this possible came about, start with why pubs are called public houses and inn, tavern or alehouse: what is the difference.

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