The Tied Public House

Part of New Clause 4 – in the House of Commons at 12:00 am on 16 May 1973.

Alert me about debates like this

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Craigton 12:00, 16 May 1973

I should like to say a few words in support of the new clause. I cannot claim to speak with all the detailed knowledge possessed by some of my hon. Friends on this subject, although on another occasion I would have been happy to take up the points put forward by my hon. Friend the Member for Glasgow, Gorbals (Mr. McElhone) in educating the Minister about the drinking habits of the constituents of Glasgow.

I wish to take as a starting point what the Monopolies Commission said in 1969. It is true, as the right hon. Lady the Member for Chislehurst (Dame Patricia Hornsby-Smith) said, that the tied house system has certain advantages in improving the amenities of certain public houses. That was recognised by the Monopolies Commission, but the commission found that the tied house system operated against the public interest on a number of grounds. The commission felt that the system was detrimental to efficient distribution. It weakened the position of independent wholesalers. It did not ensure that any benefits from reduced costs were passed on to the customer. It prevented the entry of new producers into the market. And it operated in a way which limited and avoided price competition. Unfortunately, the commission did not go on to make a number of detailed recommendations to government. It simply recommended that the matter should be considered in the context of the licensing system. Since then the Erroll Committee has been set up and has reported on the licensing system generally.

There was another consequence of the Monopolies Commission report of which the House should be reminded and it was mentioned by my hon. Friend the Member for Fife, West (Mr. William Hamilton). The Brewers' Society made a statement in 1970 following the report of the Monopolies Commission and, in effect, made certain promises to improve the practices of the large brewers in relation to the tied house system. Those promises have not been carried out, and in some respects they have been deliberately breached by the large brewers since the statement was made in 1970. Since the Monopolies Commission reported, the extent of concentration in the tied houses belonging to the major breweries has increased significantly and since the Monopolies Commission reported in 1969 there have been a number of substantial brewery mergers.

I quote a few figures to demonstrate the increase in the holding of the big brewers in public houses. The number of on-licences held in 1962 by Bass Charrington, as it then was, amounted to 3,600. In 1972 it rose to 9,200. Courage in 1962 had just over 1,000 on-licences. In 1972 it had nearly 6,000. This concentration has continued since then so the up-to-date figures would be even more significant than the ones I have quoted. One of the promises made by the Brewers' Society in 1970 was to give greater security to tenants, but the present position is that the big brewers are displacing tenants and putting in managers.

I should like to quote from an article in The Times on 3rd April this year which underlines the fact that Charring-ton, for example, are putting in more pub managers. The item said: Bass Charrington has notified 45 licensees in key public houses in London and the south-east that their establishments are to be taken over by managers employed by the company. The article then went on to say that in the previous month Truman had told 82 of its 800 or so public house tenants that they too would be replaced by managers.

The point about this—apart from the fact that it is undesirable for other reasons—is that it is specifically in breach of the promises made by the Brewers' society in response to the Monopolies Commission report with the aim of diverting the Government's attention.

There was some doubt whether the Erroll Committee should be allowed to deal with tied houses at all. Therefore, all that the Erroll Report said about tied houses was that if the Government wanted to do anything about the situation they should do it through monopolies legislation. The new clause follows the Erroll recommendation in saying that there should be something specifically in the Bill to deal with the growing monopoly of the brewers and the growing menace of tied houses and suggests that this should be done in the Bill since it is a piece of monopoly legislation.

There are a number of things which the Government could announce now. All that the Government have done so far is to say that they are considering the matter in relation to the general recommendations of the Erroll Committee, but so far we have had nothing from the Government about what they intend to do about the increasing concentration in the brewery industry and the growth of the tied house system.

There are a number of obvious things which the Government could now do. They could announce that they will allow no more brewery mergers without reference to the Monopolies and Mergers Commission. I would go further and say that the Government's attitude should be, "Unless there are very special reasons there will be no further mergers at all in the brewery industry". The Government could make that announcement now as part of their policy in respect of fair trading.

Some of the aspects of the tied house system, quite apart from the supply of beer, are completely unnecessary. There certainly need to be no ties in respect of soft drinks. Some of these practices should be banned by the Government and there is an overwhelming case for eliminating some of the more objectionable features of the tied house system.

I do not pretend that the new clause contains all that we want. We discussed this matter to some extent in Committee and we put up ideas to the Government. In fact, in Committee we tabled a much stronger new clause which would have abolished the tied house system altogether. But that was not accepted by the Government.

My point is that something requires to be done. Whether it is by introducing a new definition of a monopoly situation in a local area, as my hon. Friend the Member for Fife, West proposes, or in some other way, something is urgently required in this Bill to deal with the increasing concentration in the brewing industry and the increasing growth of the tied house system, with all its detriment to the customers of our public houses. It is from that point of view that I support the new Clause.