HC Deb 23 June 1993 vol 227 cc293-5
9. Mr. Wareing

To ask the President of the Board of Trade what representations he has received alleging abuses of monopoly power within the brewery industry; what his response has been; and if he will make a statement.

Mr. Neil Hamilton

My right hon. Friend the President of the Board of Trade and I have received several representations about the brewing industry, but these have mainly been about the treatment of tenants. If the hon. Gentleman has any evidence of abuse of monopoly power or other anti-competitive practices, it is open to him to raise these with the Director General of Fair Trading.

Mr. Wareing

Is the Minister aware of the so-called white knight policy administered by Inntrepreneur estates on behalf of Grand Metropolitan breweries, which seeks not only to circumvent the Government's Beer Orders but to extinguish the rights of its tenants in the brewery trade? Indeed, every year, 9 per cent. of those pubs go into bankruptcy. An examination of the document will show that the company's practice is sheer exploitation of the tenants and a dereliction of its duty under the Beer Orders. Will the Minister carry out a full public investigation into the activities of that brewery and that scheme?

Mr. Hamilton

The Department was sent anonymously a copy of the document to which the hon. Gentleman referred. It has been examined by my officials. Following a minute examination of what it contained, they discovered no apparent breaches of the Beer Orders.

As the hon. Gentleman will know, as a result of the intervention of Ministers, which secured sympathetic treatment of the tenants of many companies—not only the one to which he referred—we have managed to secure a significant improvement in the lot of many people who were otherwise worried about the circumstances in which they found themselves. It must be in the interests of brewers to develop a constructive relationship with their tenants. I hope that Grand Metropolitan will continue in the course of action that Ministers have urged on it.

Mr. John Greenway

Does my hon. Friend agree that, if there is one monopoly in the brewing industry that people should welcome, it is the small brewers of real ale? Does he agree that small brewers, such as Malton brewery in my constituency, provide an excellent beer for visitors to Ryedale during the summer months? If there is a problem in the brewing industry, we should address the Treasury about it to ensure that our brewers have fair and equal treatment under the tax regime affecting beer

Mr. Hamilton

I am a great personal supporter of the British brewing industry. This evening, I shall attend the launch meeting of the all-party beer group and would welcome the presence there of as many hon. Members as possible to enjoy the wonderful product, unique to this country, which offers so much enjoyment and so many employment opportunities to so many people.

Mr. Fatchett

When the price of beer has gone up above the rate of inflation, when consumer choice is still restricted and when many tenants are being pushed out of their home and business by the practices of companies such as Grand Metropolitan, why have the Government taken such a soft line with the brewers? Is the real explanation that the brewers have always been large donors to Conservative party funds and that Sir Allen Sheppard, the chairman of Grand Metropolitan. is a member of the management committee of the Conservative party? Is not this another case of the Government standing against small businesses and in favour of the vested interests that contribute to their funds?

Mr. Hamilton

I think that it is the hon. Gentleman who sounds as if he is under the influence. I doubt very much whether his evaluation accords with that of the brewers, who certainly do not think that the Government have let them off lightly. As the hon. Gentleman would know if he bothered to examine the facts, in many respects there is more competition in the industry today than before the supply of beer report. The development of independent pub chains in the industry is significant and is a consequence of the Beer Orders. Does the hon. Gentleman know, for example, of the significant reduction in the amount of beer sold through tied pubs and that recently the wholesale price of beer has diminished significantly? Perhaps one reason why the retail price of beer has increased is that pub chains and, in particular, breweries that have maintained tied pubs have greatly increased the facilities available on their premises, the costs of which must be recouped.

Mr. Ian Bruce

Having tried to implement the Monopolies and Mergers Commission report that suggested that our former regime was anti-competitive for beer, in trying to help the small brewers, surely my hon. Friend realises that the small brewers do not think that our intervention has been helpful. Will he reconsider whether we should simply remove the Beer Orders and allow the brewers, including the small brewers, to run the market as they did previously, when it was more competitive?

Mr. Hamilton

The best thing that the Government can do for the time being is nothing. The brewing industry has been through a period of convulsion, which, as far as I can see, has not been welcomed by any party. Consequently, I am not in a position to announce that we shall review the Beer Orders. They became effective fully only last November, so it is too early to determine the full consequences. We now need a period of stability to allow the industry to settle down. In due course, further inquiries will be instituted by the European Commission when the review of the block exemption for tied pubs comes along in a few years' time. These issues will not go away, but it would not be right for the Government to stir things up yet again at this time.