Greene King faces action over beer prices
Up to 90 Greene King tenants are taking action against the brewer over anti-competitive beer prices.
Lessees in the Oxford and Wantage area have enlisted the help of competition lawyers Maitland Walker to prove that Greene King is breaking competition law.
They say they cannot compete with Greene King managed houses, which are able to purchase beer from the brewer at much cheaper prices.
In a meeting with about 50 licensees last month, Maitland Walker, the law firm which is representing Bernie Crehan in his case against Inntrepreneur, has taken on the case and has confirmed that it considers Greene King has infringed the Competition Act.
Under the terms of the Competition Act, which came into force in 2000, no company can abuse a dominant position in any area of the country where they have a 40 per cent market share.
Maitland Walker is preparing a case to take in the first instance to the Office of Fair Trading. If proved, this could open the floodgates for tenants to take action against other brewers over their beer prices.
Meeko Oates, licensee of the Shoulder of Mutton in Wantage, who is spearheading the case, was a Greene King tenant for three and a half years until his pub was sold to Admiral Taverns.
He says that last year Greene King managed houses purchased Foster's for £84 for 22 gallons while tenants were forced to purchase it for £196, making it impossible for them to compete.
"This is all about the price of beer," said Mr Oates. "They are selling it to freehouses and their managed houses for as little as half the price that the tenancies are getting it. It's just not a level playing field."
Another Greene King tenant in Abingdon, Oxfordshire, who wished to remain anonymous, confirmed that he finds it hard to compete with Greene King managed pubs.
"Even wholesalers are selling Greene King beers for about 25 per cent cheaper than we can buy it for," he said. "We have to buy everything from the brewery, it's horrendous. It makes you wonder why anybody will take on a tenancy these days."
Managing director of Greene King Pub Partners, David Elliott, said: "We're surprised and disappointed to be told that there is an issue troubling a number of our tenants, particularly since they haven't yet told us about it. "If any of the group would like to contact us we would be more than happy to discuss it."
He added that the company has "a great reputation in the industry for our support to licensees and a very open policy with regards to our support package and pricing".
Mr Elliott continued: "Licensees enter into any agreement with Pub Partners with their eyes open. We go to great lengths to ensure all parties are not only aware of, but are also happy with, their terms before they sign up with us."
The 90 tenants have already raised a fighting fund of £5,000 and Mr Oates is calling on other Greene King tenants to contact him and join the fight. Call 07836 380543 or Email meeko@ntlworld.com.
