Wednesday, May 14, 2014

Pay to play?


This is an awkward one for me. Let's say I heard a story - that incentives are being sought by some pubs supplied through SIBA's DDS scheme.  Now, it's acceptable for a brewer to supply a pub with marketing materials, glassware even, to support the brewer's products which the pub has sourced through DDS.  But worryingly, I've heard (and I really can't say more than that) that some pubs are soliciting "off the books" contributions from the brewers as a condition for making orders through DDS.  These incentives may be anything from a contribution to items normally considered part of the pub's costs (over and above marketing support), to an extra cask or two delivered gratis. 


If this is truly happening - I'm appalled. Of course, I appal easily. I should really save my outrage  for more serious matters, but there you go.

If any SIBA brewers have come across this kind of thing, I'd hope that they would think very hard about reporting it officially. This kind of shit is exactly what we don't want.  DDS would become another way where larger1 businesses (who might be able to afford this kind of promotion) can deny market access to smaller2 ones (who, I guess, can't).  Anyone involved in this kind of deal should consider if there isn't a whiff of the old Bribery and Corruption about it. (note: IANAL)

You might wonder why I'm going on about this here, rather than raising the matter privately, inside SIBA.  At this point, I'm mainly interested in other people's experience. Ever heard of this? Come across it yourself? Think it's bollocks?

If anyone wants to comment in confidence, my office door is always open. (Well, it would be if the circ pump in the big chiller wasn't making such a racket)


1. or unscrupulous
2. or large, scrupulous ones

11 comments:

Cooking Lager said...

Isn't the biggest issue one of tax accountability?

So long as it goes through the books, it's just a form of discount. Off the books it's tax evasion.

StringersBeer said...

Ah well, no. If this kind of deal is happening, then the brewer would be breaking the SIBA DDS rules and the pub will most likely be breaking the terms of their agreement with the pubco. In the latter case, I wonder if this would amount to (what the law calls) "improper performance" - I know the tenant isn't an employee of the pubco, but y'know.

I'd be most surprised if something like this went criminal, but it would certainly be unethical, and a breach of the (SIBA DDS) rules.

Cooking Lager said...

So SIBA DDS rules are a price fixing thing that sets a price that cannot be discounted? That might be criminal.

StringersBeer said...

No indeed, SIBA is in the position of a wholesaler - in effect. Negotiating prices with their customers (the pubcos) and with their suppliers (the brewers). The brewer fulfils the order as part of their arrangement with SIBA. All legal. I'm assured.

StringersBeer said...

... or maybe as an agent for the brewer. Or something. Anyway I believe the system's being revised such that brewers can specify a price to be offered. God knows how that'll work. I can't see it'll make much diference to what the pubs pay once their "partners" have put their wet rent on top.

Cooking Lager said...

Ah, so more cartel than monopoly. And then you are being asked to discount from the cartel fixed price and undermine the whole cartel thingy. You can get chucked out of cartels for that type of thing.

StringersBeer said...

From what I've heard of late, it appears this kind of thing might be happening more than I thought. So it's not a very well run cartel. Given that (on the brewer's side) there's a fair range of size, and attitudes to short-term advantage, it looks like a proper cartel must be hard to run. There should always be plenty of players ready to defect like this.

Jeffrey Bell said...

Well no-one would be offering what you call "bribes" to Punch licensees on their version of the SIBA DDS as the prices paid by Punch for the beer is so low. The margin after delivery is already so low it wouldn't be worth it. Enterprise pay a chunk more so maybe it would be worthwhile with their pubs.

If the brewer offered free casks the licensee would be breaking their tie. It would be breach of lease for the publican and interference with contract by the brewer.

If what you're calling a bribe was offered in some other form - say a straight cash payment - then unless that breaches the brewer's terms with SIBA re:DDS, there wouldn't be anything wrong with it.

Now one might say it would be morally wrong because the nasty small brewery that has some money behind it and can afford to invest in customers in that way gets one up on the penniless start-up. Well I'd say that's nonsense. And you yourself have already conceded there's nothing wrong with a brewery that can afford to do so showering a pub with POS material - stuff that costs real money.

So what's your point exactly? Why are you appalled?

Jeffrey Bell said...

PS sorry for replying to an older post, just discovered your blog for the first time and scanned back. Have added you to my blogroll

Jeffrey Bell said...

PS sorry for replying to an older post, just discovered your blog for the first time and scanned back. Have added you to my blogroll

StringersBeer said...

No need to apologies, Jeffrey. To clarify: The offering of "samples or incentives" is strictly prohibited by DDS rules. And like you say, prob. "interference with contract". While accepting them is going to be some kind of breach of agreement between pub & pubco.

I'm not a lawyer, but (to me) this kind of thing (if it's happening) is clearly unethical, if not, you know, "illegal".