Allied deal casts doubt on beer rules

THE EFFECTIVENESS of the Government's Beer Orders was thrown in question yesterday by the Office of Fair Trading approving a revised supply agreement between Allied-Lyons and Pubmaster, owned by Brent Walker.

Under the new agreement the two companies will be able to revert in three years time to the original beer supply contract, which the OFT had previously said would put Allied in breach of the Beer Orders.

An OFT spokesman said: 'There was not a lot we could do about it. It is a legal issue. I would not say we were happy about it.'

John Brackenbury, chairman of Pubmaster, said: 'The deal was an important precedent for the industry. Pubmaster is a company founded on the spirit and letter of the Beer Orders.'

The original deal involved Allied leasing 734 pubs to Pubmaster and supplying more than half of its beer requirements.

Allied leased the pubs to Pubmaster as part and parcel of complying with the legislation, requiring big brewers to free from tie half the number of outlets they owned above a ceiling of 2,000.

However, the OFT said that the size of the supply deal was uncompetitive and Allied could not deem the pubs to be free of tie.

The revised supply deal, sanctioned by the authorities, has seen Pubmaster's minimal contractual obligation cut to 100,000 barrels of beer per annum from Allied, equal to 25 per cent of Pubmaster's current requirement.

There is no maximum limit, though, on the amount of beer which Pubmaster, owner of 1,900 pubs, can take from Allied, brewer of Tetley bitter.

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