(a) 800 companies in the market, but the top 4 controlling 90%
(b) 400 companies in the market, but the top 4 controlling 75%
(c) 200 companies in the market, but the top 4 controlling 50%

Now, that last bit started to become less true as the pubcos began to realise that constantly turning over tenants WAS costing them money. And the huge amounts of debt the pubcos built up on the back of over-optimistic forecasts of future income that took no regard of the possibility of a recession is now a serious problem.

But the Big Six were probably less oppressive towards their tenants in so far as they didn’t have the constant pressing need for income to service huge debts, and they recognised the need to maintain the credibility of their own brand names, which were, after all, on the outside of the pub as well as on the beers inside.

All the same, the integrated brewer/pub model was, economically, entirely artificial, a creation of the limited supply of on-trade outlets caused by the restrictions of the licensing system, and it fell apart remarkably quickly: within a couple of years. But another eight or 10 years further on, of course, and the originally large number of small pubcos had coalesced into two or three giants, whcih was an eventuality I can guarantee you nobody foresaw at the time of the Beer Orders. In fact I’ve just looked out a 4,500-word piece I wrote for the Morning Advertiser in 2004, to mark the 15th anniversary iof the beer orders, and here’s the father of the man who, by coincidence, has just been appointed to run Mitchells & Butler, the pubco remnant of Bass:

“Charles Darby, who was managing director of the Bass Taverns division at the Bass group, Britain’s biggest brewer and second-biggest pub owner in 1989, says today [ie 2004 - MC]: “I don’t think we ever envisaged a pub company growing that large – we thought maybe 2,000 pubs would be the limit – and I don’t think the politicians and the civil servants ever envisaged pub ownership being concentrated in so few hands again. All they wanted to do was to free the tie to the big brewers.”

“I think at Bass we were a fairly enlightened operator in relation to our tenants, we charged what we regarded as a fair rent, and the beer prices were by and large the same as for the free trade. Under the pubcos the whole purchasing scene changed dramatically, and the tenants lost out in a big way.”

And here’s Iain Low of Camra, who would have had a great deal to do with that organisation’s input into the MMC report that sparked the beer orders, again speaking in 2004:

“Naively, Loe says, Camra and other campaigners thought that the independent brewers would buy up chunks of newly-freed big brewers’ pubs. Those that did buy “big wodges”, however, such as Devenish, the former West Country brewer, “are no longer with us.” Above all, ‘nobody foresaw the switch from one complex monopoly to another, with the big brewers keeping their massive market share by offering deep discounts to big pub companies.’”

And here’s the conclusion to that piece from 2004:

“Could the rise of the pubcos have been stopped? Their triumph was actually predicted as long ago as 1950, by a right-wing economist called Arthur Seldon. He foresaw that the growing national brewers with heavily advertised brands would destroy the local monopoly of the small brewer, and place him under intense competitive pressure. ‘Such competition,’ Seldon wrote perceptively, ‘may lead some small brewers to sell out to the larger; others may attempt to make their houses profitable by turning themselves into … chains of “free” houses and selling the beer in greatest demand.’

“What would then happen, Seldon predicted, was that ‘Beer would then be supplied by a smaller number of specialist brewers who had disposed of their houses. The industry would then tend to separate into its two parts [pub owners and brewers] as the economic conditions in which the licensing system led to their integration faded away. The controversial “tied house” system might in time come to be recognised as a phase arising from the peculiar social and economic conditions of the 19th century.’

“So, Beer Orders or not, we would still be eventually looking at a situation where brewers with no pubs of their own supplied specialist pub companies. Maybe Lord Young need never have bothered. But at least he gave us wider choice, and the greatest number of operating breweries since Seldon made his predictions.”

And THAT, of course, is still true, with knobs on: when I wrote that piece there were only some 450 new breweries, a figure that has, I don’t need to remind you, more than doubled in eight years. Without the Beer Orders (which were scrapped in 2002), THAT would never have happened.