§ Mr. Harold Walkerasked the Minister of Trade (1) whether any views of Her Majesty's Government on the proposals of the Commission of the European Economic Community for a relaxation of the tied-house system in the licensed trade have been conveyed to the Commission;
(2) if there will be new regulations following the expiry at the end of 1982 of European Economic Community regulation 67/67 to regulate the tie between brewers and public houses; and whether these will incorporate any changes;
(3) what proposals are currently before the Commission of the European Economic Community affecting the sales of beer; if he will arrange for copies of any such proposals to be available in the Vote Office and the Library; and if such proposals will be subject to parliamentary approval;
(4) what representations he has received from the beer brewing industry regarding the proposals of the European Economic Community for a relaxation of the tied-house system in the licensed trade; and to what effect.
110W
§ Dr. Vaughan[pursuant to his reply, 5 July 1982, c. 8.]: The Commission is proposing to replace Regulation 67/67/EEC when it expires at the end of 1982 with two new regulations. These would respectively grant "block exemptions from the general ban on restrictive agreements in the treaty to exclusive distribution agreements and to exclusive purchasing agreements. The latter proposal would introduce special provisions for agreement on tied public houses.
The draft regulation on exclusive purchasing is about to be published in the Official Journal. Advance copies have been placed in the Library of each House.
The regulation would be made under powers granted to the Commission by the Council in Regulation 19/65/EEC. It would be directly applicable in all member States and would not be subject to parliamentary approval. Nevertheless, before such a regulation is adopted, the Commission is required to consult the Advisory Committee on Restrictive Practices and Monopolies, to publish a draft in the Official Journal, to invite comments, and finally to consult the advisory committee once more.
The new provisions on brewery agreements would exempt tied house arrangements on three conditions
- (i) any obligations to purchase exclusively from the brewer must relate solely to beer;
- (ii) the obligations must last no longer than 10 years and, in the case of a tenancy agreement, must not exceed the duration of the lease;
- (iii) the publican, unless a tenant, must be entitled to terminate the agreement at any time after five years, on condition that he gives one year's notice and that he makes good any benefits for which the brewer has not already been compensated.
The brewer would also be permitted to require the publican not to sell beer supplied by other companies, except beer of a type not supplied by the brewer, and to concentrate his advertising on products covered by the agreement.
These are all new provisions. The existing regulation, which is of general application, inter alia permits a brewer to draw up an exclusive purchasing agreement relating to other goods as well as beer. Arrangements made under the existing regulation may remain in force for up to five years from 1 January 1983.
The United Kingdom is represented on the advisory committee by the Office of Fair Trading, which has consulted interested parties about this proposal. It received representations from three trade associations representing the brewing industry and from commercial, consumer, and professional bodies. These views were taken into account by the office during the advisory committee's initial discussions on the proposal. We shall have a further opportunity of commenting on the proposal when the committee discusses it again.