The Supply of Beer (Tied Estate) Order 1989 and The Supply of Beer (Loan Ties, Licensed Premises and Wholesale Prices) Order 1989, commonly known as the Beer Orders, were Statutory Instruments made by the United Kingdom

Secretary of State for Trade and Industry The secretary of state for business, energy and industrial strategy, is a secretary of state in the Government of the United Kingdom, with responsibility for the Department for Business, Energy and Industrial Strategy. The incumbent is a memb ...

in December 1989.

Background

At the end of the 1980s, six national brewers dominated the market for

beer Beer is one of the oldest and the most widely consumed type of alcoholic drink in the world, and the third most popular drink overall after water and tea. It is produced by the brewing and fermentation of starches, mainly derived from ce ...

sold in

pubs A pub (short for public house) is a kind of drinking establishment which is licensed to serve alcoholic drinks for consumption on the premises. The term ''public house'' first appeared in the United Kingdom in late 17th century, and was ...

in the UK. These were Allied, Bass, Courage,

Grand Metropolitan Grand Metropolitan plc was a leisure, manufacturing and property conglomerate headquartered in England. The company was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index until it merged with Guinness plc to for ...

Scottish & Newcastle Scottish & Newcastle plc was a brewing company headquartered in Edinburgh, Scotland, which expanded from its home base to become an international business with beer volumes growing almost tenfold. The company was listed on the London Stock Exc ...

and

Whitbread Whitbread plc is a multinational British hotel and restaurant company headquartered in Houghton Regis, England. The business was founded as a brewery in 1742, and had become the largest brewery in the world by the 1780s. Its largest division ...

. This prompted concerns about lack of competition for consumers. In 1989, a report titled "The Supply of Beer: A report on the supply of beer for retail sale in the United Kingdom" was published by the

Competition Commission The Competition Commission was a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom. It was a competition regulator under t ...

. The Report contained a number of adverse findings related to the

vertical integration In microeconomics, management and international political economy, vertical integration is a term that describes the arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the suppl ...

between brewing and pub retailing, and made recommendations aimed at loosening the tie between pub retailing and brewing to facilitate easier entry by, and increasing competition between, brewers, wholesalers and pub retailers.

The Orders

The Orders restricted the number of tied pubs that could be owned by large breweries in the United Kingdom to 2,000, and required large brewer landlords to allow a

guest beer In 1989, licensing legislation passed by Margaret Thatcher's Conservative government made it possible for a tied pub to stock at least one guest beer from a different brewery. The Monopolies and Mergers Commission was concerned that the market ...

to be sourced by tenants from someone other than their landlord. The industry responded by spinning off purely pub-owning companies ("pubcos"), such as

Punch Taverns Punch Pubs & Co is a pub and bar operator in the United Kingdom, with around 1,300 leased pubs. It is headquartered in the traditional brewing centre of Burton upon Trent in Staffordshire. It was listed on the London Stock Exchange as a constit ...

Enterprise Inns Ei Group plc, formerly known as Enterprise Inns plc, is the largest pub company in the UK, with around 5,000 properties, predominantly run as leased and tenanted pubs. Ei Group plc is headquartered in Solihull, West Midlands. It was listed on ...

, and

Admiral Taverns Admiral is one of the highest ranks in some navies. In the Commonwealth nations and the United States, a "full" admiral is equivalent to a "full" general in the army or the air force, and is above vice admiral and below admiral of the fleet, ...

, from the older brewing-and-owning companies (notably

Allied Lyons Allied Domecq PLC was an international company, headquartered in Bristol, United Kingdom, that operated spirits, wine, and quick service restaurant businesses. It was once a FTSE 100 Index constituent but has been acquired by Pernod Ricard. The ...

, Bass, and

). Other companies were established such as Pub Estates Group to purchase some of the pubs for sale. By the end of 1992,

had sold almost 2,500 pubs, as a result of the orders.

Revocation

The Beer Orders were revoked in January 2003, by which time the industry had been transformed from the position in the 1980s. A

House of Commons The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. T ...

report in 2004 found that "Under any of the market definitions we have chosen, no one company, be it pubco, brewer or retail pub chain, holds a dominant position in the total market for beer".House of Commons Select Committee on Trade and Industry, https://publications.parliament.uk/pa/cm200405/cmselect/cmtrdind/128/12805.htm

References

External links

History of Punch Taverns
{{DEFAULTSORT:Beer Orders Statutory Instruments of the United Kingdom 1989 in British law Beer culture Alcohol in the United Kingdom