Brewers wary of calls for beer tie review
Regional brewers have come out in force against calls by MPs for an investigation into the tie, fearing they would be hit harshly by any measures.
The Business and Enterprise Committee (BEC) report into pub companies calls for a reform of the tie but raises concerns that abolishing it outright could "damage" regional brewers.
However, there is little confidence in the industry that moves targeting operators such as Punch Taverns and Enterprise Inns would leave regional brewers unscathed.
The wide-ranging report, published last week, also calls on the government to refer the tied pub system to the Competition Commission for a review.
Michael Turner, chairman of both London brewer Fuller's and the British Beer & Pub Association, said: "The last thing the industry needs in the current economic climate is a protracted inquiry, which could last up to two-and-a half-years.
"There would be no incentive for pub operators to invest in their estate during that period, while there remained uncertainty over the tie."
He added that the last major competition investigation into the industry, resulted in the Beer Orders which had the effect of seeing brewers' estates pass "into the hands of the two companies that are now the focus of concern."
Ralph Findlay, chief executive of Marston's, said the report had damaged the reputation of the sector, but added "as operators we will be asking ourselves how we can work better with our people," he said.
And William Robinson, director of Stockport-based Frederic Robinson, said the tied estate was fundamental to the company's structure, "with the tie being integral to stable tenancy agreements and the company's long term future as a vertically integrated brewer and pub operator.
"This surely demonstrates a strong case that small and regional brewers with a tied estate should be looked at separately from the industry's giant pubcos."
Stuart Bateman, managing director of George Bateman said the company would be willing to discuss going free-of-tie at full market rent with any tenant who wanted to.
The BEC report stated: "The position of local brewers operating a small tied estate needs to be considered; we would not wish to damage regional brewers. For these reasons we recommend an urgent investigation, rather than simply making a policy recommendation."
