Managed Pubs, Leased Pubs, Tenanted Pubs

The UK pub industry consists of nearly 60,000 pubs in total, which can be broadly categorised into one of three distinct business models:

Managed Pubs - generally owned by a pub company or brewer, operated by a salaried manager and staff employed by the pub company which also prescribes the product range and details of service style. They tend to be physically larger than leased/tenanted pubs and individual, independently owned pubs and have higher average weekly sales. Managed pub companies report total sales through their pubs as turnover and also total pub profitability.

Leased / Tenanted Pubs - tend to be smaller and are owned by a pub company or brewer and leased to and therefore operated by a third party tenant or lessee, who pays rent to the owner, is generally responsible for the maintenance of the pub and is normally contracted to purchase the drink products (in particular beer) from the pub company. These pubs have average weekly sales of around £3,000 to £5,000 and are typically more dependent on the sale of beer than managed pubs. Leased and tenanted pub companies report rent and wholesale beer sales as turnover and rent and wholesale beer margin as profit.

Individual Pubs - (sometimes known as freehouses) are independently owned and operated by private individuals, partnerships or companies who are responsible for the maintenance of the pub and retain any profits after the expenses of running the pub. The owners are free to decide which products to sell.

Sources: Office for National Statistics, Company Information and Estimates