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Competition: A Commission decision shows that small breweries with tied pub leases are outside the reach of the EC competition rules.

United Kingdom
26/04/1999
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The Commission has set a clear precedent in its decision to dismiss the complaint of tenants of Greene King regarding their beer tie-in with the brewery. The tenants, Mr and Mrs Roberts, had lodged a complaint against Greene King in 1997. They claimed that the “beer-tie-in” contained in their lease, which required them to buy the majority of their beer from the brewery, was an infringement of Article 85 of the EC Treaty. The Commission rejected this argument. While it considers the UK “on-trade” beer market to be foreclosed, the Commission believed that Greene King’s contribution to such foreclosure was too small to have a significant effect. Greene King’s sales in its tenanted, managed and tied pubs account for 1.3% of the UK on-trade market, compared to the 5% or more of each of the UK’s major brewers in their tied networks.

The rationale behind this decision is also applicable to the leases of other small or regional UK brewers, along with the leases of non-brewing pub companies which are supplied by more than one brewer. By setting such a precedent the Commission hopes to be able to focus on the restrictive agreements of the national brewers.

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