Heineken-owned Star Pubs & Bars fined £2m by the Pubs Code Adjudicator.
Breaches of the pubs code occurred over three year period, PCA said today.
Star today confirmed that it refuted 'many aspects' of the PCA's findings.
A pub group owned by drinks giant Heineken has been fined £2million by the Pubs Code Adjudicator for breaching the code over a period of three years.
In the first probe of its kind, the regulator found that where a Star Pubs & Bars pub tenant had asked to no longer be tied to Heineken, they were still made to sell 'unreasonable levels' of Heineken beers and ciders.
In the report the PCA described Star as a repeat offender and said the company had been given opportunities to set itself on the right path 'but intentionally or negligently failed to do so.'
At one point 96 tenants who requested a free-of-tie option were told that all of the keg beer they sold had to be Heineken brands, the PCA added.
Star has refuted 'many aspects' of the PCA's findings.
Lawson Mountstevens, managing director, Star Pubs & Bars, said: 'We are deeply disappointed and frustrated at the outcome of this investigation.
'There are many aspects of the report that we fundamentally disagree with and we are actively considering an appeal.
'This penalty is unwarranted and disproportionate, and comes at a time when the entire sector is in serious financial crisis as we work around the clock to support our pubs and licensees to keep their businesses afloat.'
He added that the company takes its regulatory responsibilities extremely seriously, and claimed it was ignored by the PCA when it sought guidance.
The probe, the first ever for the PCA, covers the period from 21 July 2016, when the pubs code became law, to 10 July 2019.
Under a 'tied' lease, pub tenants must buy a certain amount of beer from their landlords, but they can ask to break free of the tie using a 'market rent only' option.
This arrangement means they may still be required to stock the brewer's beer, but strict limits have been set on how much they are obliged to buy since the pubs code came into effect. This is where the PCA found the breaches.
A total of 12 breaches were identified and PCA Fiona Dickie warned that other brewers could face similar actions if required.
Ms Dickie said: 'The report of my investigation is a game-changer.
'It demonstrates that the regulator can and will act robustly to protect the rights that Parliament has given to tied tenants.
'I will be holding discussions with all the companies I regulate following my findings about how they will ensure they are code-compliant.
Pub operator Marston's will axe up to 2,150 jobs as a result of the UK's new round of coronavirus restrictions, it announced today.
The news came after it posted a 30 per cent drop in annual sales amid the pandemic.
The operator said around 2,150 of its pub workers currently on furlough support will be impacted, while it will also launch a further cost-cutting plan by the end of the year.
While a 10pm deadline on pubs, restaurants and other leisure businesses has been in place across the whole of England since last month, the government is now closing pubs and bars in 'very high' alert areas, with those in Liverpool told to shut this week.
London's mayor, Sadiq Khan, warned on Wednesday that the capital was also likely to move into tighter restrictions later this week.
Marston's put the blame for the job cuts squarely on the new nationwide measures to tackle the surge in coronavirus cases.
Marston's said the new rules were 'hugely disappointing' and claimed that there was a lack of evidence linking pubs to the recent rise in coronavirus infections.
'Inevitably, and regrettably, recent restrictions will impact jobs,' the company said.
'My message is that if anyone previously had any doubts about my resolution to act when I find breaches, they can have no doubt now.'
She said Star pubs were forced to keep selling Heineken brands, which include Birra Moretti and Symonds cider, despite repeated regulatory interventions and clear arbitration rulings from the PCA.
The regulator found that where a pub tenant had asked to no longer be tied to Heineken, they were still made to sell 'unreasonable levels' of Heineken beers and ciders.
The PCA also claimed that Star had insisted that its own Code Compliance Officer must 'ensure the code is interpreted to the commercial benefit of Heineken UK.'
In the report, the PCA also described Star as a repeat offender and said the company had been given opportunities to set itself on the right path 'but intentionally or negligently failed to do so.'
It said Star 'failed to heed statutory advice, the PCA's regulatory engagement and learnings from arbitration awards. It did not engage frankly and transparently with its tenants or meet the standards required of a regulated business when engaging with the PCA.
'Where it did change its approach, the efforts it made to comply were for the most part inadequate and not credible.'
The arbitration rulings by the PCA saw Star switch to a tiered approach but those pubs that needed little or no Heineken products faced having to stock 60 per cent Heineken keg products within one year.
The PCA highlighted that it had a significant impact on tenants in Punch Tavern pubs, which Star snapped up in 2017 for £1.8billion.
Tenants told investigators they feared that they would lose their ability to react to local conditions and changing tastes and feel forced to swap out popular products to make way for Heineken brands.
Ms Dockie said Star 'must change its mindset and become proactive in its approach to compliance.'
Heineken now has six weeks to offer a detailed response as to how it will implement the PCA's recommendations and has ordered its bosses to write to all its tenants explaining the findings.
Star has an estate of 2,500 pubs, with 1,900 in England and Wales covered by the PCA.