Withdraw from EC renewed block exemption re UK beer tie

On 20th April 2010 the European Commission (EC) agreed to continue its "block exemption" on certain "vertical agreements" which could pose competition issues, including the "beer tie", until 2022. Effectively the UK's compliance with this EC regulation will ensure the survival until at least 2022 of the national disgrace "beer tie" inflicted on UK public houses by UK pubcos and national and regional brewers. The UK "beer tie" is a major cause of the alarming closure of UK pubs (currently an average of six pub closures per day) and inflates the retail price of a pint of beer to the consumer by almost £1 per pint.

I cannot recommend strongly enough that the UK government urgently legislate to exempt the UK from compliance with the aforementioned EC directive in relation to the "beer tie" and thereby create a competitive business environment for UK pub tenants whilst also benefitting UK consumers. Whilst the "beer tie" may in the distant past have been a mutually beneficial arrangement for pub tenants, consumers and pubcos alike, it is very apparent that the pubcos and brewers have distorted it so much over the years that it now clearly pernicious, inflationery and anti-competitive – quite apart from being a restrictive practice otherwise illegal elsewhere in UK business. Both the EC and OFT have failed to appreciate this drastic change (despite the BISC's recent highly critical review of the "beer tie") although the OFT are now having to consider an appeal from CAMRA who I hope will ultimately refer the "beer tie" to the Competition Commission. However by the time these quangos wake up how many more UK pubs will have closed and thereby whole communities lost? The disappearance of sociable places of enjoyment (already suffering from the removal of the "two in a bar" live entertainment licence – which should be reinstated asap) will doubtless add further to the social problems in the UK in enforcing yet greater insularity by the population in becoming a nation of "couch potatoes".

FYI I am not employed in the UK pub trade but I am an independent accountant, concerned consumer and very worried UK citizen.

Why is this idea important?

On 20th April 2010 the European Commission (EC) agreed to continue its "block exemption" on certain "vertical agreements" which could pose competition issues, including the "beer tie", until 2022. Effectively the UK's compliance with this EC regulation will ensure the survival until at least 2022 of the national disgrace "beer tie" inflicted on UK public houses by UK pubcos and national and regional brewers. The UK "beer tie" is a major cause of the alarming closure of UK pubs (currently an average of six pub closures per day) and inflates the retail price of a pint of beer to the consumer by almost £1 per pint.

I cannot recommend strongly enough that the UK government urgently legislate to exempt the UK from compliance with the aforementioned EC directive in relation to the "beer tie" and thereby create a competitive business environment for UK pub tenants whilst also benefitting UK consumers. Whilst the "beer tie" may in the distant past have been a mutually beneficial arrangement for pub tenants, consumers and pubcos alike, it is very apparent that the pubcos and brewers have distorted it so much over the years that it now clearly pernicious, inflationery and anti-competitive – quite apart from being a restrictive practice otherwise illegal elsewhere in UK business. Both the EC and OFT have failed to appreciate this drastic change (despite the BISC's recent highly critical review of the "beer tie") although the OFT are now having to consider an appeal from CAMRA who I hope will ultimately refer the "beer tie" to the Competition Commission. However by the time these quangos wake up how many more UK pubs will have closed and thereby whole communities lost? The disappearance of sociable places of enjoyment (already suffering from the removal of the "two in a bar" live entertainment licence – which should be reinstated asap) will doubtless add further to the social problems in the UK in enforcing yet greater insularity by the population in becoming a nation of "couch potatoes".

FYI I am not employed in the UK pub trade but I am an independent accountant, concerned consumer and very worried UK citizen.

It should be made clear that the Consumer Credit Act does not apply to Amateur Sports Club Subscription instalment schemes

We wished to provide our Members with the facility to pay their Annual sports club subscriptions (<£800) by monthly instalments in order to make membership more affordable in these difficult times.

Our legal advice was that this required us to obtain a Consumer Credit Licence and to register under anti-money laundering regulations.  However, other legally authorities are known to hold the view that the situation is not entirely clear cut.  Nonetheless, the general advice on CCA is if in doubt, then you should register – so we have.

If we had continued to insist that Subscriptions are paid annually in advance and in full, then niether act applies. 

The introduction of the scheme has cost us several thousand pounds in fees, which ultimately has to be borne by the Members of the Club, as it is a non-profit making entity.  It has also added significantly to administrative workload and complexity.

The application of both laws to this situation of a self administered scheme (where there is no actual lending of cash) seems well beyond the intention of the legislation and out of proportion to the perceived risks to the idividual and to the state that the Laws are attempting to address. It therefore makes membership of amateur sports clubs such as ours unnecessarily less affordable than they would otherwise be and adds to the Club's unnecessary "red tape".

It is quite possible that the law makers would consider that such self administered annual instalment spreading schemes do already  fall outside the respective Laws but no one is prepared to say so uneqivocally (despite lobbying by the National Golf Club Advisory Association).

What's needed is a definite statement that neither Law applies for self administered annual subscription spreading schemes of this type, where no actual cash loan is involved.

Why is this idea important?

We wished to provide our Members with the facility to pay their Annual sports club subscriptions (<£800) by monthly instalments in order to make membership more affordable in these difficult times.

Our legal advice was that this required us to obtain a Consumer Credit Licence and to register under anti-money laundering regulations.  However, other legally authorities are known to hold the view that the situation is not entirely clear cut.  Nonetheless, the general advice on CCA is if in doubt, then you should register – so we have.

If we had continued to insist that Subscriptions are paid annually in advance and in full, then niether act applies. 

The introduction of the scheme has cost us several thousand pounds in fees, which ultimately has to be borne by the Members of the Club, as it is a non-profit making entity.  It has also added significantly to administrative workload and complexity.

The application of both laws to this situation of a self administered scheme (where there is no actual lending of cash) seems well beyond the intention of the legislation and out of proportion to the perceived risks to the idividual and to the state that the Laws are attempting to address. It therefore makes membership of amateur sports clubs such as ours unnecessarily less affordable than they would otherwise be and adds to the Club's unnecessary "red tape".

It is quite possible that the law makers would consider that such self administered annual instalment spreading schemes do already  fall outside the respective Laws but no one is prepared to say so uneqivocally (despite lobbying by the National Golf Club Advisory Association).

What's needed is a definite statement that neither Law applies for self administered annual subscription spreading schemes of this type, where no actual cash loan is involved.

Consumer Credit Licences

Many business are constituted as groups of limited companies – usually 100% owned by the top, parent company.

This should be streamlined so that Group licences are available.

I am sure that there are other compliance processes where this principle could be extended such as Data Protection Notification, FSA registration, etc.

Why is this idea important?

Many business are constituted as groups of limited companies – usually 100% owned by the top, parent company.

This should be streamlined so that Group licences are available.

I am sure that there are other compliance processes where this principle could be extended such as Data Protection Notification, FSA registration, etc.

Implimentation of a Taylor Law (see US legislation) for monopoly industries in the UK.

Make monopolies fully accountable for their actions by implimenting something similar to the Taylor Law in the US (specifically New York).

In a monopoly market forces fail because there is no alternative to the customer.  Therefore the customer needs to be protected from the monopoly refusing to provide the service it is contractually abliged to do.

A good example is the Underground in London. I dont care why they are not providing a service on certain days (and that INCLUDES strikes). I care how much money it has cost me because they havent provided that service.

They need to be open to compensation payemnts and not be able to refuse on the grounds that there was a strike – that is their problem.

I would look at extending this to non-monopolies as well. Its about time BA for example fully compensation people and businesses for withdrawing their service. 

Why is this idea important?

Make monopolies fully accountable for their actions by implimenting something similar to the Taylor Law in the US (specifically New York).

In a monopoly market forces fail because there is no alternative to the customer.  Therefore the customer needs to be protected from the monopoly refusing to provide the service it is contractually abliged to do.

A good example is the Underground in London. I dont care why they are not providing a service on certain days (and that INCLUDES strikes). I care how much money it has cost me because they havent provided that service.

They need to be open to compensation payemnts and not be able to refuse on the grounds that there was a strike – that is their problem.

I would look at extending this to non-monopolies as well. Its about time BA for example fully compensation people and businesses for withdrawing their service.