Tim Hampson's Beer Blog

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Government intervention in industry, like a butterfly’s wings opening in the Amazon

with 3 comments

1989 was a pivotal year for the brewing industry. The pro-business and anti-intervention Thatcher government introduced legislation which would radically change the nature of brewing and pub retailing in the UK. As a result breweries closed and thousands of pubs were put up for sale. The Beer Orders had a dramatic and unprecedented effect on the brewing industry and its profound repercussions are still felt today.

These turbulent times and the inquiry into the supply of beer are charted by four industry experts in the book “Intervention in the Modern UK Brewing Industry”.

The authors John Spicer, Chris Thurman, John Walters and Simon all played pivotal roles in those turbulent times and their insightful writings provide a unique analysis of the issues, the people involved and the consequences. The book should become a must read for any student of the structure of the industry and what has helped shape it. What started as an application of economic theory, resulted like a chaos theory butterfly opening its wings in a forest in the Amazon, in unimaginable economic turbulence.

Government intervention through the Beer Orders precipitated and accelerated a chain of events which saw the demise of many family brewers and the separation of many pubs from the communities they served.

One can argue that the pubcos have been a disaster and they are now behemoths waiting for extinction. And yes, we are lucky that following the introduction of small brewers’ tax relief (arguably another act of government intervention) the resultant wave of new brewers are a revelation. They are the one glimmer from the sorry mess of the 1989 inquiry. These new companies are pushing beer and the pubs they are buying pub to new heights. Britain has never had a richer and more dynamic beer culture.

However, the underlying message from this excellent book has to be – instead of reading brewing  in the title insert “banks”, “the health service”, “our lives” and wonder are poiliticans best placed to sort out the mess they cause?

The book deserves to become essential reading for any student of government and the nature of its relationship with businesses

“Intervention in the Modern UK Brewing Industry”, published by Palgrave Macmillan, £65.

Written by timhampson

February 12, 2012 at 7:25 pm

Posted in Uncategorized

3 Responses

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  1. As Milton Friedman once said, “The government solution to a problem is usually as bad as the problem.”

    It’s interesting to speculate how different the British brewing landscape would be now if the Beer Orders had never happened. Possibly much the same process of divestment of underperforming tied estates and takeover by foreign brewers would have occurred. The large vertically integrated brewer with a big tied estate was already starting to look somewhat anachronistic in 1989.


    February 12, 2012 at 7:50 pm

    • I think much of what you say is absolutely correct. However, the angst and pain caused to
      some companies cetainly set back investment in beer and pubs for a decade


      February 12, 2012 at 8:04 pm

  2. The Law of Unintended Consequences is always the most powerful player in these circumstances.

    Martyn Cornell

    February 13, 2012 at 12:33 pm

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