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Dec 20, 2014

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Lower beer prices?

English court rules against chain that forced publican to charge more for a pint

May 21, 2004 - A court ruling in England could free thousands of "tied pubs" from agreement that forces them to charge customers more for their beer, and British beer drinkers would benefit with lower prices.

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Lawyers say the court victory by a publican in the test case might cost the the pub chain Inntrepreneur more than 100 million. Bernie Crehan was awarded damages amounting with interest to 250,000 after the Court of Appeal reversed the findings of a High Court ruling last year.

About 600 other publicans are now set to be awarded up to 100 million damages by Inntrepreneur, which is owned by the Japanese bank Nomura. Julian Maitland Walker, the lawyer who brought the case on behalf of Crehan, said the former publican went out of business with personal losses of more than 100,000 as a direct result of the tie.

The agreement forced him to sell beer at about 1.50 a pint in the early 1990s when his "free house" competitors were able to charge 1 to 1.20.

"If the beer tie ends this could allow pubs to buy beer more cheaply from other sources and could bring the price of a pint of beer down," said Michelle Perrett of the Publican newspaper.

The landmark ruling comes a week after MPs launched a formal investigation into how the relationship between landlords and tenants has affected beer prices. There has been growing concern that concentration of thousands of pubs in the ownership of a handful of huge chains could work against consumers.

Beer prices have risen ahead of inflation over the past 20 years.


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