Family brewers' tie fears

Family brewers fear being squeezed out of the market by global brewers and smaller microbrewers if either a compulsory guest beer or free-of-tie option is introduced.

Although Independent Family Brewers of Britain (IFBB) chairman Paul Wells got little chance to put across the group's view at the Business, Innovation & Skills Committee oral hearing, its written submission said its members "strongly opposed" a free-of-tie option.

"We do not want to be in the position of selling competitor brewers' beer in our own pubs carrying full branding of our own breweries."

It added: "The complete abolition of the tie will result in brewery closures, the loss of well known and respected beer brands and the loss of more of the great pubs for which Britain is famous.

"This will impact on all communities — suburban and rural — in terms of the loss of the hub of the community, and jobs for local people and local suppliers, plus also have the effect of reducing consumer choice and competition."

It stressed similar fears on the outcome if it was forced to offer a guest-beer option to tenants. "If given the freedom to have a guest beer, a sensible licensee would choose the beer with the largest volume of sales, and go to the market to find the best discount and price for that beer.

"Due to market supply and demand, the best discounts would thus be available from the global brewers.

"Similarly, a local microbrewer could offer substantial discounts, as they benefit from progressive beer duty (an effective 50% excise duty rate).

"These concerns demonstrate how the beer tie is a careful balance between wet and dry rent.

"A mandatory guest beer provision would change the balance in the same way as a free-of-tie option, and we predict the same outcome in terms of brewery closures."

The IFBB said only 41 of its members pubs closed during 2009.