Alcohol: Supply of Beer (Tied Estate) Order

Question

15:04:00

Asked By

Lord Razzall
To ask Her Majesty’s Government what proposals they have to review the operation of the Supply of Beer (Tied Estate) Order 1989.

The Minister for Communications, Technology and Broadcasting (Lord Carter of Barnes)
None, my Lords. The decision to repeal the beer orders, in the Supply of Beer (Tied Estate) (Revocation) Order 2002, was taken on advice from the competition authorities. Any decision to re-evaluate the market will be a matter for the OFT.

Lord Razzall
My Lords, does the Minister accept that since the so-called beer orders were introduced in 1989, there has been a significant change in the market that often disadvantages particularly the consumer or the tenant of public houses? Is he aware that the Business and Enterprise Committee of another place has recommended that this should be looked at again? In particular, what does he have to say about the committee’s recommendation that the Secretary of State should refer the matter to the Competition Commission for urgent investigation by a body which has no vested interest in “defending its earlier position”?

Lord Carter of Barnes
My Lords, I have been increasing my knowledge of the beer market with enthusiasm in anticipation of this Question, and the noble Lord is right to point out that since the so-called beer orders were revoked, the market has changed significantly. The noble Lord rightly points to the Business and Enterprise Committee report, which raises a number of general issues along with that of the beer tie. As he knows, my department is due to respond to the report within 60 days, subject to further developments on this matter.

I suspect that he is also aware that the Campaign for Real Ale, known as CAMRA, is for the purposes of this discussion a designated body under the Enterprise Act 2002 and is therefore qualified to submit a super-complaint to the Office of Fair Trading. It has indicated that it intends to do so shortly on issues related to the beer tie. That would result in the Office of Fair Trading having to consider the complaint very carefully and respond within 90 days. On the specific point about an organisation being able to look at the matter again in an open-minded fashion, I have every confidence in the ability of the OFT in that regard.

Lord De Mauley
My Lords, as we have apparently heard from the Minister, it is now government policy to embrace price control. Are the Government considering whether to follow the Scots example by putting a minimum retail price on beer?

Lord Carter of Barnes
My Lords, no, is the short answer. As the noble Lord knows, alcohol duty and pricing matters are for people other than me. However, I thank him for the question.

Lord Cotter
My Lords, in 2004, the Trade and Industry Committee concluded:

“At this stage we do not think a legally binding code of practice is necessary … but if the industry does not comply with the voluntary code, the Government should consider a statutory code”.
 

I mention this in light of the fact that the FSB, in its report to the current inquiry, states that a recent survey found that 99 per cent of the publicans who responded said that the situation had not changed or improved. Is it not now the time for strong and clear action?

Lord Carter of Barnes
My Lords, the noble Lord makes a point about the change in circumstances since this was last looked at, and he is absolutely right to highlight the fact that the published research shows that a significant number of strong voices rightly make the point he has alluded to. The position of the competition authorities on this is rightly that if there is new evidence that there has been a significant change in circumstances, the evidence should be submitted. As I said in response to the noble Lord, Lord Razzall, we have seen an indication that that evidence will be provided in the case of a super-complaint. If that results in the need for stronger action, then stronger action will duly be considered.