§ Mr. Wellbelovedasked the President of the Board of Trade whether he is now ready to publish the Monopolies Commission Report on the supply of beer.
§ Mr. CroslandThe Report was published this morning. The Commission found that monopoly conditions, as defined in the legislation, prevail in the supply of beer for retail sale on licensed premises, since at least one-third of the beer so supplied is supplied by persons who, as owners of licensed premises, prescribe the brands of beer which shall and shall not be sold on the premises.
The Commission found that the tied house system, as operated in the conditions of restricted competition resulting from the licensing laws, has certain disadvantages. The elimination of inefficient, high cost and redundant brewing capacity 184W is retarded. The tied house system is to some extent detrimental to (as well as being inessential to) the creation by brewers of rational and efficient systems of distribution in contemporary conditions. The system has weakened, or prevented the growth of, independent wholesalers of wines, spirits, etc. The brewers are not under pressure (except when selling certain products through the off-licensed retail trade) to pass on any price advantage they gain by the exercise of their strong bargaining power vis-à-vis independent producers and suppliers. The entry of new producers and new products (other than the brewers' own new products) is hindered. Moreover, competition among brewers principally takes the form of competition to acquire captive portions of the retail market and to improve the amenities of their captive outlets. As a result, the retail trade is generally more uncompetitive than it would be in any event under current licensing conditions and, in particular, price competition is practically absent as between public houses. The Commission found few positive advantages that appeared to flow from the tied house system to offset these disadvantages, and therefore concluded that the monopoly conditions operate, and may be expected to operate, against the public interest.
The Commission discussed alternative arrangements within the existing licensing framework but did not recommend them. It therefore recommended that, by way of remedy for the defects which it found in the tied house system in the United Kingdom, the licensing system in England and Wales should be substantially relaxed (with the situations in Scotland and Northern Ireland being reviewed separately by the authorities concerned), the general objective being to permit the sale of alcoholic drinks, for consumption on or off the premises, by any retailer whose character and premises satisfied certain minimum standards.
I shall make a further statement shortly.