Wednesday, 13 May 2009

It's Official: Pubcos Are Evil (and CAMRA supports them)

The House of Commons Business and Enterprise Committee has published its report on the Pubcos.

You can find the full report here.

A rosy picture of the pubcos it ain't. I've so far only studied the first six of eighty or so pages. These quotes should give you a flavour of the findings:

"Our call for evidence gave us two irreconcilable pictures of the industry. The first presented a picture in which pubcos operating the tie were able to give their lessees considerable support, and in which the admittedly higher costs of tied products were offset by lower rental and extra support and services. The second picture, which came from individual lessees and from campaign groups, was of an industry in which the higher costs imposed by ties meant that lessees were at a disadvantage to free of tie competitors and pubcos used their superior bargaining power to exploit lessees, in many cases failing to carry out their contractual duties, while refusing to give lessees in difficulties any leeway. "

"There is a worrying pattern in the evidence presented to us of lack of support for lessees, of verbal agreements not honoured, and, on occasion, of downright bullying. "

"We have no confidence that the advantages of the tie outweigh its drawbacks."

"The practice of pubcos selling buildings they no longer require with restrictive covenants preventing their use as a pub should be banned."

"However, our provisional view is that the tie should be severely limited to ensure there is proper competition in the market."

"As is noted elsewhere in this Report,8 in evidence to us both Mr Thorley of Punch and Mr Tuppen and Mr Townsend of Enterprise Inns made assertions which, on investigation, proved to give a partial picture, or on one occasion were positively false. We recognise that those giving oral evidence may need to simplify a complex picture, and that slips of the tongue may occur, but these repeated slips have undermined the reliability of their evidence. "

No doubt the remaining seventy-something pages will reveal more unflattering insight into the pubcos.

So, I hear you ask, what does CAMRA make of all this?

Mike Benner:

“Camra supports the principle of the beer tie provided that the higher prices licensees are required to pay for their beer supplies are balanced by a lower rent, credible business support and the option of stocking a guest beer.”

Like a turkey supporting Christmas, CAMRA once again declares explicit support for the tie. Yes folks, the very same tie system that prevents microbreweries selling to nine out of ten pubs and that screws pub tenants. Sure it guarantees sales for the regionals (so many of whose beers are duller than ditchwater) but it seriously inhibits new entrants into the market. It holds back real ale.

The whingeing "stocking a guest beer" demand is cop-out. What CAMRA really means to say is "we want special case treatment for real ale such that any pub regardless of tie obligations must stock a real ale supplied directly by a brewer we approve of". Wrong wrong wrong.


Anonymous said...

I think the last paragraph in your blog goes too easy on CAMRA, it doesn't point out that CAMRA are trying by means of obfuscation to get an easy ride for their selected darlings i.e boring, complacent and equally twatish regionals who are just pubcos in disguise.

Anonymous said...

Nice insight jeff. It's interesting reading, I have printed a copy and been going over the whole thing with a highlighter.


Jeff Rosenmeier said...

You are spot on Jeff. CAMRA (as well as SIBA for that matter) support of the tie smells funny to me. The tie is anti-competitive, affecting small independent brewers the most, and I struggle to see how anyone can see it any other way.