OFT re-opens beer tie investigation
5 February, 2010
Surprise move sees comments invited from the trade
The OFT has re-opened its examination of the beer tie - and has invited further comments from the industry on its response to CAMRA's super-complaint.
In a statement, the organisation said it had made the move in an attempt to head off the costly appeal against its October ruling that no action was required on the tie - even though it still believes it has a firm basis to defend its case.
"The OFT is mindful of the substantial resource that both it and CAMRA would need to invest in litigation," it said. "The OFT has therefore decided that it would be a more constructive use of resources to allow CAMRA and any other interested persons or groups the opportunity to make representations about the findings it reached in its response to the super-complaint."
CAMRA has welcomed the move. Chief executive Mike Benner said: "We are delighted that the OFT has responded to our appeal by agreeing to conduct an open consultation and I encourage all parties to use this opportunity to submit further evidence of anti-competitive practice. The consultation will lead to a new and final decision from the OFT.
"We are hopeful that on re-examination of the pubs market the OFT will decide to act against anti-competitive behaviour in order to deliver a fair deal for consumers. CAMRA looks forward to working with the OFT to deliver reform of the beer tie so that the pub market works in the interests of consumers."
CAMRA’s fundraising appeal for the reform of the beer tie, which raised over £8,000 since January, will be suspended during the consultation period, with the existing funds put towards CAMRA’s legal fees.
Mark Hastings, the British Beer & Pub Associations's communications director, said: “We fully appreciate why the OFT is seeking a constructive alternative to the Competition Appeal Tribunal process, which would be expensive and time-consuming for all parties. We believe the OFT’s original decision was robust and based on a sound assessment of the evidence. We look forward to engaging fully in the consultation process.”
Last October the OFT announced that it had found no evidence that the beer tie was resulting in competition problems that are having an adverse impact on consumers, and that it would therefore be taking no further action. CAMRA subsequently applied for a review of the OFT’s decision before the Competition Appeal Tribunal.
The OFT said it will now consider further representations and evidence and decide how to proceed before publishing its final views - with its examination of the beer tie continuing "to focus on whether effective competition is delivering choice and value for consumers".
Written views on the OFT’s response to the super-complaint, should be submitted by 5pm on March 24 to:
CAMRA Super-complaint Team,
Office of Fair Trading,
Fleetbank House, 2-6 Salisbury Square,
London EC4Y 8JX
or email CAMRAsuper-complaint@oft.gsi.gov.uk
Readers' comments
Smithers, I am prevented by a promise given to MJD and Roland from responding in full but suffice to say that it's obvious who has a University education here and who does not. I would however say that anyone posting really quite preposterous 'deals' in a forum with absolutely no corroboration has a tad of a problem with their credibility. For further information, I'm a true blue Tory although I am thinking of switching further right.
Jack - And people wonder why the supply price here is so high? Perhaps it is because the taxes and duty due have been paid.
In my opinion, anyone buying iffy cheap imports should have their Passport confiscated, preferably shortly having been dropped off in the Country they chose to buy their dishonest goods from.
Does anyone know when the BEC report is due out?
Good point ken, i shall state the "bleeding Obvious" for you and the other Simpleton, I am always on the lookout for cheap suppliers, sometimes dearer than other times, this is the trouble with "free trade" the supplies are irratic, but I always manage to pay less than half of tied prices. I hope this clears things up for you both, (a basic nursery education would have helped you understand this, had you not both been expelled!) though I am not quite sure how it connects me to colins beloved labour party ?
Smithers, first you paid £2 for a 22 then you paid £20 for an 11 then you paid £25 for an 11 and now you are looking for a supplier to pay£30 for an 11
You really should give your stock purchasing a thorough going over especially for someone as astute as you, as you seem to be paying more every week rather than less
Ken Nason
Smithers, spoken like a true Labour supporter of mass uncontrolled immigration. You DO seem to be rather selective in whose and which party policies you follow, have you looked at the Monster Raving Loony party recently?
Jack, could you send these people my way please? i prefer to give my money to these poor unemployed foreign chappy's, it's nothing to do with the discount!
An 11 of Heineken in Czech at trade can be got for £16-18 squids. Sounds like a supplier taking advantage of the free movement of goods and trade within Europe. Where is customs and excise on this matter? I have been offered 11's of Heinekin in Central London for £30 before from people who say V instead of W many times.
Paul, it is morally wrong to buy beer for your struggling pub for anything less than the tied price that your poor ikel wikel pubcon is chargeing you, it is seen as Outrageous to post these heavily discounted prices on here! You risk being "Flayed Alive". mmmm, 40 quid per keg? watch this space!
haveing a laugh, yes, you do have to laugh though, i can do a whole blog, then go out and buy some cheap untied beer, for a fraction of the cost that tied beer costs and when I get back to my Bunker, having obviously more than doubled my money, i find that all hell has broken loose! I feel there are two of us laughing!
SteveW, we are all in the same trade and things arent easy. My disappearing profit is due to 4 factors....tied prices, rising overheads, taxation, and increased entertainment costs, to replace lost weekday business. With no discount we already charge £3 for standard lager and to exceed that will deter more customers so my GP is suffering. EIs not our problem attitude of keep raising prices is akin to a death wish. They are taking 75k p.a. from this pub in rent and profit on tied product now leaving us with maybe 5k. They need a reality check, things are coming home to roost. Regarding keg price to pubco, I have to be careful what I say. If you work on about 40 pounds plus vat including duty you wont be far off.
Having a laugh, not just waiting for his next post but awaiting some sanity in his next post or actual reference to matters pertinent to the licensed trade. Hence my observation that he is a plant (take that how you will) Ken Nason
Paul - no mistake on my part? Ken made a comment about Smither's continuing "fantasy of the 20 quid keg". You then responded (8 February, 2010, 13:46) by saying "Like your last post Ken. Take 20 pounds and add the appropriate beer/cider duty and it may make sense". That's why I made the comment that I did, because nobody can quote a price net of duty, only net of VAT? Regarding your other points, I can sympathise (although I'm not sure how any licensee can work their wage on an hourly basis, as that would drive you nuts!), but is the drop ALL down to EI or also due to many other factors? I'm FOT but my costs are already higher than last year by 12p/pint? Any retail price increase might just be able to cover the coming rises (budget, rates, etc), which means I'm looking at 12p/pint less forever...
Colin, I cannot believe your eagle eye missed 09/02/10 00:51:33. But enough frippery. You have finally spelt my name correctly, so some progress there. Your request for red roses does concern me however.
Actually Paul, you were quoted with total accuracy, as always. paul salvadori 09/02/2010 00:32:23 "If you take Smithers as representative of the GMB or Pub Revolution then you are more foolish than I thought". Nothing else in the post to quote. Now I can fully understand why Smithers might consider that you've stabbed him in the back and also that this could easily cause a serious tiff between you. However,Feb 14th isn't too far away so let's hope for the best eh? Red roses always do the trick for me.
Well spotted Colin. Sadly you didnt post the full comment I made. May I complete it, "Not my style but he likes winding up smug gits". Too close to home Colin?
At long last the inside track on Comrade Smithers is revealed by none other than his only ally, Paul Salvadori. Whilst Paul was on one of his usual rants on 'another forum' he let this slip. I know Paul won't mind me quoting him thus. "If you take Smithers as representative of the GMB or Pub Revolution then you are more foolish than I thought." Now THAT is excellent news and achieves more in the way of credibility for GMB than refunding subscriptions. Doesn't do much for Pub Revolution though, they just lost 50% of their membership.
Smithers I think Ken, Steve W, and Colin Matlock must do nothing but wait for your postings.
SteveW, I am surprised at your misunderstanding of my post on this topic. Use that brain to understand it, put it in context to what has been much discussed before. And how does it defend the enigmatic Smithers ? Thank you for your interest, the Aviator is trading very well, turnover up 4 per cent on the last 12 months, despite tough times, and has increased every year since we took it. Be sure I only tell the truth, to do otherwise is a waste of time. The problem is, it is trading well, EI are doing very well, but despite the creditable trade my earnings have dropped from a miserable 6 pounds an hour to 2 pounds an hour due to the shortsighted greed of my landlords. This is unsustainable and sadly is typical of most pubco lessees. Hence GMB Pub Revolution. The only option to hasten the inevitable change.
Good point Ken, but I think you and Roland may have underestimated me. Remember the "enough rope" part of your comment and watch what happens over my blog in the next couple of days.
Smithers, "being forced by PUB REVOLUTION AND GMB to re-open the beer tie enquiry" ? You'll have to excuse me because I must have missed it but where in the article does it say that?
smithers. Then stop behaving like one! So, CamRA said it was going to take legal action, and even launched an appeal. But it was the GMB who got it re-opened. For God's sake, have a word with yourself. You wonder why we think you are an idiot? Oh, and you are welcome to take me to Court anytime, if I have dented your ego, Roland I am sure will provide your Solicitor with my details, but remember, loser pays!
Quite right SteveW, it was me who mentioned GMB and Pub Revolution.
Paul (how is The Aviator doing by the way?), the obvious flaw in your defense of Smithers' comments it that he cannot claim 20 pounds to be his purchase price net of duty, because he cannot buy beer net of duty? Smithers - nowhere does this story mention GMB...
Smithers I think you are letting Rolands "enough rope to hang yourself" policy of allowing your "blog" to go to your head. You are not one of the editorial team so your continual instructions to posters, usually after several of your own diversions, to get back on topic have no validity and echo a spoilt child stamping their feet. FACT GMB had no say whatsoever in the decision of the OFT to revisit the tied aspect of the decision on the CAMRA complaint. If they did then lets have the factual proof other than the GMB created the world in six days and on the seventh sold membership. Ken Nason
ken, the article is about the OFT being forced by PUB REVOLUTION AND GMB to re-open the beer tie enquiry, have you not got anything sensible to wright ?
So Smithers you have never used abusive name calling to any other poster have you? Ken Nason
smithers. Oh read the bottom couple of posts. You know, the serious ones before you went off on one again!
HL, if i were to keep insulting people on here by calling them idiots and lunatics, i hope i would be severely reprimanded.
HL, don't you have anything remotely relating to the subject of this article to post onhere ?
Smithers. It is not an anti-Pub Revolution agenda, it is without doubt an anti-idiot policy. Sadly, it would seem those at the Publican have no objection to your lies and the bovine waste you spin-out, but many of us do. You have on numerous occasion, instead of letting us think you are an idiot, you have leapt to your keyboard removed all doubt.
Ken, colin, I do wish you would both calm down, your ridiculous rhetoric is boreing other forum users. I do not complain about you trashing everything i write, I simply point out that with such viscious anti-Pub Revolution propaganda, can anyone ever take either of you seriously ??
RIGHT then Smithers ! You have SOLD the idea to me. I smoke Dunhill International and as I can buy them for 70p a packet in Moscow I'm being royally ripped off by the Supermarket here who charge me £6,32p for 20. So I'm going to go into Tesco this afternoon and I'm going to be bloody RUTHLESS with them ! I will ask for 20 Dunhill Int and tell them that I'll only pay 2 quid and if they don't agree, I won't buy from them and I'll take my valued custom elsewhere ! THAT'LL damned well teach 'em and the good bit is that the Security guard is only a little fella so he won't be able to drag me out.
Smithers if you don't like being challenged on your posts and are not prepare to offer support for your claims then refrain from posting and stop complaining when others dismiss your claims as fantasy. No one critisises anyone getting the best deal possible, that's business not fantasy. Quite simple really. Ken Nason
Brian, I really don't understand why being ruthless with my suppliers of tied beer and cider causes people to insult me in so much, i simply stated that its a free market out there if you are not tied, obviously, if you have an untied lease you should be acheiving the best discounts possible for yourself, many of the smaller beer suppliers cannot give good enough discounts for me, so i only use them when i am forced too.
Like your last post Ken. Take 20 pounds and add the appropriate beer/cider duty and it may make sense.
No, it is not "Dodgy", watchdog, if you are paying around 60 quid from bookers, what do you think they, or indeed their suppliers are paying for it ? even in your wildest estimates i am sure you would conceive that a company as large as bookers would be right to expect more than 20 quid profit? It's worth remembering that several people on the forums would like you to think that you cannot acheive a good discount on beer, the opposite, in a free market, is true.
Smithers, even Karl Harrison says you're a liar and it don't come worse than that.
Watch Dog, very well spotted. I suspect that this £20 cider is recycled from the urinals and the 'supplier' has actually found someone dumb enough to buy it. Alternatively of course it's knocked off which is much better news. Receiving stolen goods should get our resident Comrade off this forum for at least 12 months ( with good behaviour ) . We could be charitable and buy him soap on a rope so he doesn't drop it in the shower.
It is be really nice to see proper transparency when this is re examined. The OFT got it wrong, lets us hope they put it right. I sincerely hope that Peter Luft and many more are watching closely to see that there is an open, honest and fair review.
re; OFT re-opens beer tie investigation aside from colins rantings on here, this is marvelous news, its exactly what we have all been campaining for, incidently colin, i just bought 5 kegs of cider for 100 pounds, is this ok, or should i have forced the supplier to take more money from me, as i would have paid more had it been tied?
The tie is killing the pub trade. The pub companies when buying a ‘free house’ regularly work on a wholesale profit of £150 per barrel in the ROCE appraisal before completing an individual acquisition. To give a tenant £40 odd pounds of this is an insult. Sure the lease agreement should be carefully considered before entering into, but upwards only rent review clauses in many contracts in a trade that is in decline is killing even the best operators off. The debt level – revenue – reality valuations of the large pub companies are horrendous. The massive drop in share prices of Punch & EIS perhaps reflects the city’s view this. Best of luck in your plans.
Bookers were selling 11g of Carlsberg for 65 quid (nearly half what Punch charge us) - but 20 quid??? If true, it must be dodgy!
Mike you will be waiting a long long time for Smithers to come up with any explanations for ANY of his claims based on his history so far on this site(or the other). I am rapidly concluding that he in fact is a Pubco plant designed to discredit the actions of GMB by his statements that not one genuine licensee with any trade experience could even give any credence to. I cannot see how any organisation could claim him for their own as everything he posts is clearly made up or finds it's origins in the bottom of a bottle.He clearly finds the intellect of those who question his manic posts too much as witnessed by his regular calls to posters on facebook to post on publican in support of his epistles, which they evidently do in their usual uneducated way. So, as illustrated by his latest forray into the fantasy of the 20 quid keg fiasco I think he should be allowed to entertain us with his fantasy pub scenario for it is I think good for those in the trade to have some light relief and humour in their hard pressed lives now and again. Ken Nason
Colin give it a rest. The OFT did not do a good job first time round, and there is no reason to believe that they will do any better this time. They had been fed information from ETI and Punch that was not real and the BBPA also, the BBPA are now know for telling portkies. The whole affair has been a total sham. The Cmpetition Commission is the only way forward. We have to have honesty once and for all, we are sick to death of this spin from the BBPA fed to them by ETI.
Pubco's as we all know, put us in the position that they charge a ridiculous amount of rent, have us on fully repairing leases & then tie us on everything! when we struggle cos of recession.. snow & beer tax-of course they 'assist'! what options do they have? the poor pubco's don't want us to hand back the keys-cos they then would have to maintain their buildings & pay the non domestic rates.. so, the help.. give you a bit of a discount (still not as cheap as you can buy from any other suppliers-that they sell to, mark you!) & they put you on temporary rent reductions-that you have to jump through hoops for.. OF COURSE THEY NEED INVESTIGATING! The sad thing is, even now, seeing the tough times our trade are suffering, we always have new to the trades that have blinkers on falling for the claptrap that these blackwidow pubco's spout, & so the cycle will continue, until OFT see that we're not bleeting sheep, but that actually we're hard working everyday folk that just want to be able to earn an honest living! As for the £20 a barrel-I've been in the industry for 30 years.. & it sounds like lala land to me (but prove me wrong!) so, unless your buying it from a dodgy drayman thats conned a trusting publican into signing for an empty barrel-if so then shame on you!-I'm afraid I have to say I don't believe it
Mike, I have a freehouse and although not selling huge amounts I can buy most products at around half the price of tied houses.The tie is not the only issue effecting the trade, but at least it would give people a chance to make a living.
Smithers - how can you expect anyone to take you seriously? The excise duty alone on an 11 gal keg is much higher than the 20 pounds you puport to pay for your kegs. You must be the only publican in the country who has a supplier that enjoys losing at least 30 pounds for every keg he sells! The only alternative is that you're buying stolen products? So which are you, a liar or a thief?
I would like to ask Smithers where you buy you 20 quid 11gal beers from and what beers they are. The cheapest I could find, free of tie, was over christmas when Bookers were selling carlsberg for 65 quid and at any other time I pay 66.99.
I'm not sure whether Smithers is paying just £20 for an 11 gallon keg and perhaps it is a mistake. There are many examples to quote but essentially we started of last year using Carling and that is still relevant. 11 gallons might be purchased free of tie quite easily for £65-70 or less. The same from companies such as Enterprise Inns etc can cost in excess of £130. Free of tie discounts per 36 gallon barrel are obtainable fairly easily at up to £180. Whilst pubcos may offer no discount to their tenants they will secure discounts of up to £250 or more on a 36 gallon barrel along with healthy credit terms. There is no sensible or sustainable reason for the difference of as much as 100% on an 11 gallon keg of laged.
Colin Matlock I am a tied licensee, and I will sell my beer less than I am now doing when I am free of tie, and I think there are many more who will do the same. The difference is we will be able to, as well as manking a profit, this profit will mean I can take a wage, and pay some bills. I am not asking for a lot, just to look after my kids and survive.
Mike you are not doing a very good job, as any freetrader is less than the £80 you are quoting, also if you go to a brewer, I know you can get it for £60, as I have.
Much as I disagree with 99% of what "Mr Matlock" posts, I feel that "Comrade Smithers" unsubstantiated comments and claims are undermining any good that the movement is attempting to do. I refused to join because I find it amateurish and childish in its current form. However I do believe wholeheartedly that the pubcos are guilty of underhand tactics driven initially by greed and now by need. They certainly make alot more from our pub than we do. Time has come for a full, impartial, open and informed investigation.
Colin. smithers will not share the information because he is trying to blag everyone. He does not share that information either in face-book or any other site, and trust me I know for certain! He often link the threads here and was encourages the other idiots to pop in and comment to support his lies. We are all certain the man is a buffoon, I doubt very much whether he is actually in the trade, particularly as his old face-book thing stated he was not, then changed when challenged. We know it is not worth debating with him, he is unable to make even the most basic of comments that contribute. Let his rant and continue to shoot him down by all means, but let us not give it credence by attempting to include it in rational debate.
I am so glad that CAMRA and the OFT are looking at the beer tie again. It will be interesting to see if they can manage to make a greater mess of Britain's brewing heritage than the Mergers and Monopolies Report of 1989. Maybe we could end up with just one multi-national factory producing a single brand, or do we already have that?
Oh Comrade, tell you what, you post the details of your �20 a keg supplier and I promise not to look. OK? I'm sure you realise how vital this is for all of the many millions of tied tenants hanging on your every word and you owe a duty of care to your fellow man. As to "all pub revolution movement members on Facebook,", nope, I still can't find 'pub revolution' on facebook. Could it be that you've named it something else? Witless loonies perhaps? Basketweavers-R-us maybe?
I am free of tie and despite shopping around and pushing for the greatest level of discount that I can negotiate I am still paying at least four times teh twenty pounds Mr Smithers is quoting. This level of discrepancy is so great that one has to question the truth of his claim. It is therefore reasonable for us to expect him to provide evidence to back up his claim and if he cannot then many will believe that he is not telling the truth. I suspect that if people feel he is lieing about this issue then they will treat all his other comments with the same contempt.
Colin, details are given out to all pub revolution movement members on Facebook, this is what we are doing, whilst you are busy slagging us off on here, No, i certainly will not be sharing any of the details of any of my suppliers with you, as you are against buying beer at reasonable free of tie prices. Now, the title of this article was about the re-opening of the enquiry into the beer tie, so i shall put a brief comment, The Beer Tie is wholly immoral and is against all rules of modern business in Europe, it has to go to enable our pubs to continue providing our customers with better quality products and better quality drinking houses. No doubt many publcians will not heed my advice which i regularly give out through our facebook sight and they will be bankrupt before this "investigation"(i use the term losely) is finished.
its not that i'm totally against the tie, we as tied leaseholders want a fair deal our pubco is giving us some help at the moment but there's always conditions come with it, we want to be a partnership with them after all its in their interest to work with us the oft should listen to the publicans at the sharp end and fully investigate the buying power the pubco has against what poor discounts they offer their lessee.
Commrade.....I would check the sell by date on those kegs.
Comrade, as one of the Pub Revolution luminaries you owe it to your fellow tied licensees to disclose exactly how and where you achieve such massive discounts on even the manufactured cost of an 11g keg of beer. Your brothers in GMB will be so delighted with you that I think you will rightly assume the mantle of a corporeal deity. Do I have to say please?
Tom I agree with you, in this industry which has now become so corrupt, it is vitat that there is some form of transparency and honesty to be seen. I have become so pessamistic , I would love to be proven wrong, and that there are some honest people/companies/organisations left who actually care about the pub trade.
I regularly pay only 20 quid for my 11 gallon kegs of beer, though i don't see how it will muddy the waters in what will soon be a free market, once we get rid of the pubcons and the leeches that have clung onto the hard-working landlords for decades. it's called "Fair Trade UK" we are here to stay, get used to it.
So who is going to tell the OFT that prices to the consumer are GUARANTEED to reduce with removal of the tie and of course and by how much? No waffle guys, no 'of course prices will be cheaper' no 'its up to each licensee to do the right thing'. Because without such a guarantee, the OFT will just laugh you out of the door.
Goodness me do I note a modicum of common sense creeping into government departments. Theres hope for the trade after all if this catches on.
Looks like they were scared of being shown up as a sham at the tribunal to me.
I deal with several FOT leases and many tied leases; fully-fledged 'Property Companies' charge significantly more rent and you only see them once a quarter when they issue an informal Schedule Of Dilaps. Whilst some FOT leases may be on excellent terms the majority that I have seen are not - the grass is not necessarily greener on the other side. As I have said before, do not buy a Mondeo and complain it is not a BMW. Why do so many freeholders and FOT leaseholders take tied leases with pubcos?
Please could someone provide me with advice on what specific information should be sent to the Super Complaint Team and in what format it should be sent. As an Enterprise Inns leaseholder I feel I have much to give, however, I presume that the information should be delivered without the emotion that often prevents the hard facts and evidence from shining through. Any advice much appreciated. Thank you.
Tom. I am certain there will. However, let us hope it is proper fact based evidence and not the ramblings of those who tell everyone they can pick up a Tub for 20 quid, as this kind of idiotic comment can do nothing but muddy the waters, something which will be rather self-defeating at the end of the day!
I am sure that there will be a huge amount of further evidence sent into the OFT, whether the investigate it is another matter. This is the time for the OFT to demand to know what the pubscos pay the brewers and then see what the selling on DIFFERENCE price is to the tenant,