Appendix 1: Government Response
1. The Government very much welcomes the Report and
wishes to pass on its gratitude to the Committee for all their
hard work and diligence over the past few years in arriving at
such a valuable Report.
2. The Business, Innovation and Skills Committee
Report makes a number of recommendations to the pub industry,
the Government and to the Office of Fair Trading.
3. We very much hope that industry accepts the challenge
that it has been set and works together in an effective and constructive
way. In particular there is a special emphasis on the British
Beer and Pub Association (BBPA) and the British Institute of Innkeeping
(BII) in making sure that the Framework Code and the subsequent
accreditation process works within the proposed timescales in
a way that it is mutually beneficial to those across the whole
industry. The Independent Pub Confederation (IPC) and the Royal
Institution of Chartered Surveyors (RICS) also have a key role
to play in ensuring a successful outcome.
4. You will be aware that the Government announced
today a support package to provide practical help to community
pubs during this difficult trading period. The package includes
business support, industry standards and consumer choice and community
and local authority action. The support measures included in
the industry standards and consumer choice sections address the
recommendations made to Government on Brulines and the effectiveness
of the BBPA Framework Code. Please find attached a copy of the
communication for your information. On the specific recommendations
made to Government our response is as follows:
Recommendation
"The accuracy of data from flow monitoring
equipment and the analysis of that data are highly contentious
issues. Flow monitoring equipment could be a helpful tool, for
both pub companies and lessees but only if it is reliable and
has the confidence of both sides. Clearly this is not the case
at the moment. We recommend that the Government, through the National
Measurement Office, urgently clarifies the position of beer flow
monitoring equipment in relation to the Weights and Measures Act
1985. Such equipment must be included under the Act for calibration
and verification purposes". (Paragraph 69)
5. It is right that monitoring equipment of this
type should be accurate and reliable. Government is clear that
the industry should voluntarily ensure that all such measuring
equipment is calibrated by the National Measurements Office. However
should the industry fail to do so within a reasonable timeframe
this will result in Government prescribing the equipment to ensure
fairness.
Recommendation
"The industry must be aware that this is
its last opportunity for self-regulated reform. If it cannot deliver
this time, then government intervention will be necessary. We
do not advocate such intervention at this stage, but remain committed
to a resolution to all the problems discussed in this Report and
those of the 2004 and 2009 Reports. Should those problems persist
beyond June 2011, we will not hesitate to recommend that legislation
to provide statutory regulation be introduced". (Paragraph
158)
6. In its support package communication Government
has made it very clear that it accepts the Business, Innovation
and Skills Committee recommendation for the effective operation
of the British Beer and Pub Association Code of Practice on tenancies
and leases. This is further backed up by a clear statement that
Government gives the industry until June 2011 to improve. If the
Business, Innovation and Skills Committee concludes by then that
the Code is not working as well as it should we will consult on
putting the Code on a statutory basis with effective enforcement.
The Code of Practice should also incorporate a beer/non-beer tie
option for tenants with a commitment that the Government will
act if the industry does not. In addition the industry should
introduce voluntary provision for tenants to offer a guest beer
outside the traditional beer tie as part of the code with Government
action to introduce an order if industry fails to act.
Recommendation
"We urge the Government to monitor the success
or otherwise of industry initiatives for reform and to keep the
possibility of a reference to the Competition Commission firmly
on the agenda. We also urge the Office of Fair Trading to look
more carefully at the issues involved as it responds to CAMRA's
super-complaint for the second time. The serious imbalance in
power between pub companies and lessees that has prompted this
Report and the two earlier ones must be a matter of deep concern
to policy makers who are working to ensure that markets work fairly
to the benefit of consumers". (Paragraph 160)
7. Government will be doing what it can to encourage
the various parties to work together over the coming weeks and
months with the objective of reaching a situation where further
government intervention is unnecessary. We intend to monitor progress
at regular intervals.
8. At this stage the Government has not ruled out
a reference to the Competition Commission.
9. The Office of Fair Trading (OFT) is consulting
on its findings in response to the super-complaint lodged by CAMRA
in July 2009. The OFT is inviting parties to comment on its findings.
10. The OFT will consider parties' responses to the
consultation, including additional evidence as may be put forward
as part of parties' representations, and pursue such further investigation
as it considers appropriate, before publishing its final views
regarding the super-complaint.
11. The OFT's examination of the beer tie following
CAMRA's super-complaint will continue to focus on whether
effective competition is delivering choice and value for consumers.
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