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.
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.
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