Thursday, 14 May 2009

MPs slam power of the pubcos

Review of the beer tie must
not hit independent brewers

Parliament's Business and Enterprise Committee (BEC) wants a full-scale review of the "beer tie" to be conducted by the Competition Commission -- but such a review must be careful to distinguish between the giant national pub companies and family and independent brewers.
The BEC's report this week correctly identified the high-handed activities of some of the pubcos, who charge tenants and lessees exorbitant rents while selling them expensive beer. Many people running pubco outlets have been driven into poverty and destitution as a result of their landlords' policies. The committee of MPs found that many lessees and tenants easrn as little as £15,000 a year in return for working long hours and often seven days a week.
But it's important for any future review to distinguish betweeen the pubcos and brewers who tie their pubs. The tie is the bedrock of independent brewers' business. If the tie were to be totally abolished, the national brewers would swoop on regional brewers' pubs offering them heavily-discounted lagers and keg beers. It would be a disaster for cask beer, the only sector showing any sign of growth at present. It would also mean the inevitable closure of many smaller brewers who would be unable to compete with national beer brands in their own pubs.
In countries where the beer tie is illegal, the situation is far worse than in Britain. In the United States, where brewers are not allowed to retail beer, they sign sweetheart deals with large distribution companies that take only the products from one brewery. It means that smaller craft brewers cannot get their beers on to the distribution companies' trucks. The result is a market skewed in favour of the giant brewers and less choice for consumers.
In Britain, the national pubcos -- Enterprise, M&B and Punch -- need and deserve a thorough investigation and should be told to change their ways. But any investigation must also recognise the vital contribution that independent brewers make to local communities and must be allowed to sell their beers through their own tied estates.

3 Comments:

Anonymous Anonymous said...

Wrong in so many ways.

15 May 2009 at 12:30  
Anonymous Fatman said...

"The tie is the bedrock of independent brewers' business" - No, only a limited number. Most are competing successfully in the free trade without their own estate.

"If the tie were to be totally abolished, the national brewers would swoop on regional brewers' pubs offering them heavily-discounted lagers and keg beers." Er, free market? You seem to be suggesting that independent brewer's are keeping prices artificially high.

"It would be a disaster for cask beer" why? Cask ale is doing great in the free trade even against 'heavily discounted lagers and keg beers'.

"It would also mean the inevitable closure of many smaller brewers who would be unable to compete with national beer brands in their own pubs" No, it would ensure they raised their game, brewed better beer and treated their tenants properly.

And the final bit about the States is simply rubbish - the craft brewing sector in the US is far larger proportionally than it is in the UK and still enjoys double digit growth.

It isn't that I disagree with the notion of retaining the tie for regional brewers, it's that these arguments are highly dubious.

15 May 2009 at 17:21  
Anonymous Funny T-Shirts said...

I'm trying to support the pub trade by wearing one of these.

1 June 2009 at 11:01  

Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home