90 days to reshape the trade
The politics of the tie took another twist this week. Camra, the real-ale lobbyist, evoked its consumer status as a "super-complainant" and asked the Office of Fair Trading to investigate whether the beer tie is fair.
The move was greeted with howls of protest by Fair Pint and other anti-pubco licensees. They feel it may scupper the more intensive red-blooded inquiry that they believe the Competition Commission would carry out — and which they are convinced would call for the tie to be scrapped as part of a new Beer Orders.
As they see it, the OFT's track record of approval for the current system is bound to mean another rubber-stamping exercise by our regulators, which will have the pubcos hugging themselves in delight.
These disaffected licensees also worry that a clean bill of health from the OFT would unduly influence the European Commission when it comes to review the British tie in the first half of next year. Again, the status quo would prevail.
Camra's reason for requesting an OFT inquiry, which was backed by John Grogan, chairman of the All-Party Parliamentary Beer Group, is to get a quick result on the tie's future — rather than wait two to three years for a full-scale Competition Commission decision.
That makes sense if you believe the OFT will this time approach the issue of the tie with a more open mind than in its previous inquiries. The odds for that happening are not good if all it sees is that no one pubco dominates the market — ergo there is no market distortion at play and things can continue as they are. Unless the OFT digs far deeper, in the way suggested by the Bec Report, nothing will change. And that, say the Fair Pinters, is exactly Camra's intention — to preserve the tie at all costs.
That's unfair to Camra. It's true that it wants to keep the tie. But it also wants licensees to get a better deal from their pubco. It explicitly states that it has long been concerned about "the unbalanced relationship between pub companies and lessees and hopes that Government will look at the issue with great urgency." No sign of soft deals with pubcos there, as critics sometimes maintain.
Camra meets the OFT shortly to explain its case, and it's then a question of waiting 90 days for a decision. This may well be to reject Camra's call. Running parallel to this is the Government's thinking on how to respond to Bec, which it must do before the end of July, at least a month before the OFT's decision is due.
There will clearly be some very interesting discussions going on between politicians, senior civil servants and competition regulators over whether to dovetail the two decisions. It continues to be a very tense time for all in the trade, as the decisions arrived at soon will undoubtedly shape the industry's future for at least the next decade.
