Monday, 18 January 2010

One small step or one giant leap?

Many pub goers will know something about the tie by which pub companies (pubcos) sell beer to pubs at inflated prices far higher than those on the open market.  Pubco ties are protected by something called the Land Agreements Exclusion Order 2004, which exempts them from competition laws.  I've no idea how this nonsense came about, but it's there nonetheless.  The government has just announced the revocation of this Order from April 2011, which means that large pubcos will have to prove that their beer tie agreements fully comply with competition law.

Now I'm by no means an expert on the subject and would be wary of trying to predict the consequences of this action, but it has been warmly welcomed as "very positive news for pub-goers, small brewers and struggling lessees" by CAMRA - full press release here.  On the other hand, the British Beer and Pub Association, which represents the industry, says scrapping land agreement legislation won't change how pubcos act, because their leases already comply with competition law - full Morning Advertiser article here - although I suspect they may be putting a brave face on something they don't like.

On balance I think this is probably not a great leap forward, but more likely just a step in the right direction, which is better than nothing.  "Time will tell ~ it always does."

The picture shows a Brewery Tie.

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