Greene King comes out fighting over beer prices row
Greene King has defended itself against accusations from tenants that it is breaking competition law over its beer prices. Pub Partners managing director David Elliott (pictured) sent a letter to all Greene King tenants rejecting the allegations following The Publican's exclusive story last week.
Over 90 tenants are taking legal action against the brewer and have hired competition lawyers Maitland Walker to represent them.
The tenants say they cannot compete with Greene King managed houses, which are able to purchase beer from the brewer at much cheaper prices.
Responding to the tenants' concerns, Mr Elliott confirms that Greene King has not had any formal communication with the group of licensees involved. He refutes claims that within the Oxford area Greene King has a 40 per cent market share.
He also dismisses the accusation that licensees cannot compete because Greene King managed houses can buy beer cheaper than the tenanted houses. He says this is "incorrect" and the comparison figures are meaningless as Greene King is supplying its own pubs.
But Meeko Oates, a previous Greene King licensee who runs the Shoulder of Mutton in Wantage, Oxfordshire, and is spearheading the campaign, said: "I am not surprised that Greene King has sent out the letter. I have done a survey and in the 12 miles around Abingdon I think it has more than 40 per cent share. The average tenant is just not making any money."
The news of the Greene King case has brought a raft of responses from licensees on thepublican.com.
Andy Brooks, licensee of the Laughing Fish in Isfield, East Sussex, defended Greene King, saying: "As tenants we get a hugely subsidised rent and great support with maintenance costs.
"Because of this, we can afford to sell at a lower GP than a freehouse, and still make a good bottom-line profit, despite the cost price of the beer."
Further defence came from tenant Jacqueline Cahill of the Old Tom, St Aldates, Oxfordshire. She said: "Should we have opted for a free-of-tie or indeed a freehold, we would have paid a much bigger premium."
But John Ross Monteiro, licensee of the Bugle in Reading, Berkshire, commented: "The breweries and pub companies which own pubs and bars have been turning the "low income" pubs and bars to tenancies and leasing them to the unsuspecting for years."
Click hereto read David Elliott's letter to tenants in full.
- Meeko Oates, licensee of the Shoulder of Mutton, 38 Wallingford Street, Wantage, OX12 8AX, is spearheading the case and is asking for other Greene King licensees to contact him and donate money for the campaign. Call 07836 380543.
Related articles:
Greene King faces action over beer prices (12 May 2005)
