Wednesday, 13 May 2009

Guilty!

The Business and Enterprise Committee (Bec) report has found “alarming evidence” that there may be serious problems caused by the dominance of the large pub companies. Well we all knew that didn't we, but now it's official?

The Bec found among other things, that the evidence from Punch Taverns and Enterprise Inns gave only a 'partial picture' or was 'positively false'. Appallingly it reveals that 67% of PubCo licensees are earning less than £15,000 a year, despite in some cases having a turnover of over half a million pounds. The Chairman of the committee said “There must be a legal framework that takes account of the imbalance of bargaining power between licensees and pubcos.” The Bec doesn't recommend the scrapping of the beer tie, but says that more detailed analysis of the market is required and that there is a need to protect regional brewers.

So what next? The Committee recommends that the Government refer the matter to the Competition Commission for action, but this could take between two and three years. There is an alternative view, favoured by CAMRA, that the operation of the beer tie could be referred to the Office of Fair Trading to deal with the matter more quickly. However, such is the damning picture painted by the Bec, that a full referral to the Competition Commission seems inevitable.

8 comments:

Jeff Pickthall said...

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

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

Tandleman said...

"The position of local brewers operating a small tied estate also needs to be considered; we would not wish to damage regional brewers. For these reasons we are calling for an urgent investigation rather than making a policy recommendation."

Anonymous said...

I suspect the some of the licencees who claim to earn less than £15,000 a year may be earning quite a lot more. That figure may be just what they're declaring to HMRC and the Inland Revenue...

Ed said...

Aren't punch and enterprise going to go bust soon anyway?

Tandleman said...

Anonymous. You have no real reason to think that.

Ed. Punch maybe. Enterprise almost certainly not.

Philip said...

£15k - no wonder pubs are closing

Bailey said...

It was interesting to see the coverage this got in the Guardian today -- a half page article in the finance section, and then an opinion piece.

Woolpack Dave said...

15k, luxury!

And no, I don't think many licensees dodge taxes. Do you know how quickly HMRC can come down on you if they suspect anything?

Most pubs make much more for the inland revenue than they make for themselves.