The tied house system has long been a bone of contention in beer drinking circles. Should those companies that own and operate pubs but do not brew have the right to insist that their tenants and franchisees buy their beer only from them, usually at above market price, and when the landlord is buying in the beer. This is, of course, in addition to the pub’s rent. The situation is slightly different in the case of pub-owning breweries who are, at least, selling their own beer, but also needs reviewing.
This business model for pubcos was secured by an exemption made under European Union competition rules. When the UK left the EU, that regulation passed into UK law. The Competition and Markets Authority have been conducting an ‘access to market’ review into its operation for the last two years.
CAMRA had been encouraged by the review but become impatient that no progress is being made in what appears to be a simple issue. Consequently, we have decided to put the case to the public in the form of a report called Beer in the UK. There are a number of issues affecting pub finances, not least unregulated energy prices and employment costs, but having to pay over the odds for beers that publicans – or their customers – do not really want and being denied the right to buy in beer from more interesting and often local breweries at a more reasonable price is at the forefront of them. A more interesting beer range rather than what we have come to know now as the ‘usual suspects’ would also attract more customers.
The report explains three crucial points:
• Seven of the top ten selling ‘craft beers’ in the UK are made by just four global brewing conglomerates;
• Many of the UK’s favourite ‘continental’ and ‘import’ lagers are actually brewed in the UK;
• Data from the Society of Independent Brewers and Associates (SIBA) shows that the demand for independent beer is 280% higher than the share that they have of the pub market.
The UK’s alcohol duty system is also considered to be in need of review.
CAMRA’s chairman, Ash Corbett-Collins, commented, “Ordinary drinkers are being short changed when it comes to choice and quality at the bar. Our report proves how the global players are exploiting the status quo to squeeze out independent brewers, to the detriment of ordinary publicans and beer drinkers. The Government needs to step up, start taking the issue seriously, and take action that matches up to their statements about supporting pubs and the communities they serve.”
Editor of the report, beer writer Tim Webb, added, “The fact that a narrow clique of multinational corporations dominates the UK brewing industry is a national embarrassment. They only make beers that suit their production facilities, ignoring the types that beer lovers want to drink. They do not know how to reverse beer’s downward spiral, make little profit, and brew nothing worth exporting. They cannot grow the UK economy. The way that better, independent, brewers are excluded from the on-trade beer market is scandalous.”
The report has the support of SIBA. Their chief executive, Andy Slee, said, “As Europe’s largest beer consumer group, CAMRA is right to call for change for a UK brewing industry which is dominated by global beer giants which restricts access for British independent breweries. At the heart of its excellent report is a call for greater consumer choice, transparency around brewery ownership, and lower taxes for small independent breweries which SIBA wholeheartedly supports. Eighty percent of beer drinkers want to see independent beer alongside global brands on the bar, yet our indie brewers are locked out of supplying 63 per cent of pubs. This is bad for pubgoers, bad for landlords, and bad for the health and vibrancy of the British pub and beer market.”
Beer in the UK (28 pages) contains a lot of information that will make readers think. It can be downloaded at camra.org.uk/beer-report.