You know when we talk about beer and value we talk about the price of hops, whether only snob appeal justifies a forty-three dollar price point and that sort of stuff but we don't really get at the real issue: middlemen. A report today out of the UK's Business and Enterprise Committee highlights another form of the middleman's plumage, the tied pub contract:
An estimated 30,800 pubs - more than half the UK total - are under tied contracts. The arrangement has come in for criticism amid charges that the tie, under which a tenant often pays much higher prices than free houses or managed pub operators, is pushing them out of business. In the report, MPs are demanding greater transparency over rent-setting and an independent system for settling disputes. They want tenants to be given the opportunity to run pubs free of the tie - although the report stopped short of calling for its abolition.
But isn't the house tied to the brewery, you ask? Well, I would think that a brewery with a "real property division" is more absentee landlord than brewery. And in any event the layering of profit of the tied system is no different than the distributors of Pennsylvania or The Beer Store of Ontario. In each case, legal structures are used to create less than open market systems through which a mandated middleman of some sort is put in place and given a cap to have in hand to get their cut. The suits, the board rooms, the expense accounts must be paid for somehow, you know. I'll pay some today when I shell out the 10% "lost mark-up" fee to the LCBO for bringing beer back into Canada from the USA. The form actually says "provincial liquor mark-up fee" but it means lost profits due to me buying beers elsewhere that the government store does not offer. The beast must be fed.
Middlemen. They are a huge price input who provide questionable or illusionary value. They cost you money. Is it not worth noting that it must be the only word not lobbied out of existence in favour of gender neutrality?






Comments
Paul Garrard - May 19, 2009 4:34 PM
Mmm, isn't the middleman the hub of Western economies?
I'm not a great lover of the tie but as long as no one is allowed to dominate then they have a right to exist I suppose.
Alan - May 19, 2009 5:08 PM
Hub? I suppose they are as long as we have a hub-centric (and what better sort of centric) economy. What does a hub require for care and feeding? Greater respect for those at the hub than those at either ends of the transaction, the creator and the consumer.
kyle - May 19, 2009 11:07 PM
I have always been outraged at the taxes and middleman fees on beer, especially in the USA (only because that is what i am most familiar with) I read one statistic one time that 50% of the price of a bottle of beer is taxes and fees that are accrued from seed to bottle.
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