§ Mr. BaldryTo ask the Secretary of State for Trade and Industry what decisions he has reached in the light of representations on the draft orders on the supply of beer.
§ Mr. RidleyI have received representations from a wide range of parties including large and small brewers, tenants' associations, and wholesale and consumer organisations. All representations have been given careful consideration.
I have now reached final decisions on the orders. The main changes I have decided to make are as follows. First, I have decided that national brewers who are required to free a proportion of their properties from product ties should be able to sell such properties without disadvantage provided they are sold free of ties. This amendment will encourage a more diverse pattern of ownership. I have also decided that in view of the substantial changes brewers will be required to make to a large number of tenancy agreements to free part of their estates the period for such adjustment will run to November 1992.
104W
§ Mr. RedwoodThe figures are as follows:
Secondly, many representations have emphasised the importance of ensuring that tenants of the national brewers should not be subject to pressures to discourage them from exercising their freedom to choose to supply a guest beer. Accordingly, I have amended the guest beer provisions to block a number of possible loopholes that brewers might have used to deter tenants from exercising their choice, and to make it clearer that tenants should be entirely free to choose their supplier.
Thirdly, the position in respect of those companies, mainly small brewers, who are not subsidiaries but nevertheless fell to be regarded as parts of large brewery groups by virtue of minority shareholdings in them is amended. It will now be provided that no obligations will fall on a company solely because a member of a large brewery group has a minority interest in it. The tied estates of such companies will, however, still count towards the brewery group's limit on tied houses if more than 15 per cent. of the voting rights of the company are held, though account is now due to be taken of the extent to which control of shares is diluted through intermediary companies, if the group owns less than 50 per cent. of the voting rights. The 15 per cent. rule remains, as I believe that a group can exercise a substantial influence at this level of shareholding. The rule will act as some deterrent to further concentration in the industry.
Finally, the definition of licensed premises has been changed so that the limits on the numbers of tied houses held by national brewers will no longer bite on premises with restricted licences, such as restaurants, where the supply of beer is not a significant part of the business.
105WThe Office of Fair Trading will be making arrangements to monitor compliance with the orders. The director general will need to collect information for this purpose, and a further order will he made shortly to cover this.
As was made clear in my right hon. and noble Friend's statement of 10 July the director general will be assessing the effectiveness of the measures in addressing the market detriments found by the MMC once the orders have had time to take effect. The Government will consider the need for further measures in the light of the director general's conclusions. If in the meantime, however, it becomes clear that further steps are necessary either to ensure compliance with the intentions behind the order, or to deal with other anti-competitive or undesirable practices, I will not hesitate to act as necessary.
In this connection, I shall be keeping under review the position of tenants in advance of enactment of legislation to put their security of tenure on the same basis as that of other business tenants. If necessary, I will consider making an interim order to protect their position. I have also asked the director general to keep under review any anti-competitive moves to limit access to the market by independent manufacturers of beer or other drinks who are without tied estates, or by wholesalers. The Government intend separately to legislate to give tenants protection under the landlord and tenant legislation as soon as parliamentary time permits.
The changes I have outlined, and other technical points raised in representations, have required a significant number of changes to the orders. Copies of the orders have today been placed in the Libraries of both House and sent to the principal interested parties.
Any representations on technical drafting points that arise from the revised texts should be submitted to my Department by 10 November. The Loan Ties, Licensed Premises and Wholesale Prices Order will then be made, and the draft Tied Estate Order, which requires resolutions of both Houses, will be laid shortly afterwards.
§ Mr. David NicholsonTo ask the Secretary of State for Trade and Industry what information he has on proposals by certain breweries to permit tenants to sell a guest beer but to replace any sales lost to the landlord brewery by higher rent.
§ Mr. RedwoodI have received representations from the National Licensed Victuallers Association and others that this might occur. It is being made clear in a separate statement made today that the brewer cannot discriminate against a tenant exercising this right.
§ Mr. David NicholsonTo ask the Secretary of State for Trade and Industry how many representations he has had since the publication of the Monopolies and Mergers Commission Report on the supply of beer specifically supporting the introduction of a sliding scale of duty; whether he now favours such a proposal; and if he will make a statement.
§ Mr. RedwoodWell over 2,000 written representations have been received. An analysis of each one to determine whether a particular point had been made would be possible only at disproportionate cost. Officials of Customs and Excise are in the process of informally consulting with the trade on the possibility of changing to a method of charging duty based on the beer that is actually produced. The final decision is a matter for my right hon. Friend the Chancellor of the Exchequer.
106W
§ Mr. David NicholsonTo ask the Secretary of State for Trade and Industry how many representations he has had since the publication of the Monopolies and Mergers Commission report on the supply of beer which regret the absence from its report of recommendations to reduce regional and subregional monopolies; whether he will extend the guest ale provision to public houses owned by regional brewers; and if he will make a statement.
§ Mr. RedwoodWell over 2,000 written representations have been received. An analysis of each one to determine whether a particular point had been made would be possible only at disproportionate cost. It has been made clear that the requirement to allow tied tenants to choose a guest beer will apply only to the national brewers.