Australia's largest owner of freehold pubs, ALE Property Group, has locked horns with its tenant, Woolworths-backed operator ALH Group, over rental increases across nearly 40 of its properties in a dispute whose outcome could have far-reaching implications for pub values and rents across the country.

The ASX-listed pub landlord, whose biggest shareholder is blue-chip investment firm Caledonia led by rich lister Will Vickers, said it had taken the position that 78 properties should be subject to 10 per cent annual rental increases, the maximum increase allowable under capped market rent reviews, which take effect from November.