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Friday, 14 January, 2000, 17:49 GMT
Doubt poured on beer rules

pub Ties between brewers and pubs are under scrutiny

Competition watchdogs are launching a new investigation into links between brewers and pubs, after a decade of major shake-up in the UK's brewing industry.

The Office of Fair Trading says it wants to ensure drinkers benefit from sufficient choice and that the market is open to competition.

The OFT will look at "Beer Orders", rulings which were drafted in 1989 to control the ownership of large numbers of pubs by major brewers.

pub Most pubs are no longer owned by big brewers

They set limits on the number of pubs brewers may own, or deal with on a tied purchasing basis, and protect the right of pub tenants to buy alcoholic drinks from sources of their own choosing.

The orders also require brewers to publish wholesale prices and to provide the OFT with annual information on their pub estates.

The orders were intended to prevent brewers restricting the choice of drinks at pubs or having too much dominance in pubs ownership.

At that time, major brewers owned about half the UK's pubs, but now the figure has dropped to 16%.

Most owners now are investment companies such as Japanese bank Nomura and specialist operators such as Punch Taverns.

Shares slip down

John Bridgeman, director general of fair trading, said: "We will be consulting widely to determine the impact of the orders and subsequent changes in the pub ownership - as well as brewery consolidation and rationalisation - on competition and consumer choice."

Shares in Britain's three biggest brewers all slipped amid concerns on the effect on their own pub estates, and a leading broker downgraded two of the stocks.

Scottish and Newcastle Plc was off 7p at 423p, Whitbread down 26p to 580p and Bass fell 3p to 697p.

But both Bass and Whitbread welcomed the OFT review.

"We don't see the review affecting our strategy at all. We would welcome an update on the regulations," said Richard North of Bass.

Over the last six months, the OFT has cleared Scottish buying Greenalls' 765 pub estate and Bass purchasing the largest 550 Allied Domecq managed houses. But it blocked a takeover by Whitbread of the whole Allied estate, which was later sold to Punch Taverns.

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See also:
16 Jul 99 |  The Company File
Allied and Punch work on deal
15 Jul 99 |  The Company File
Whitbread surrenders in fight over Allied
14 Sep 99 |  The Company File
Greenalls pubs go Scottish

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