George and Lynne are at a pub. George notices that Tim is celebrating his wedding anniversary. As Tim kisses the woman he's with, George continues to say that it looks like he's certainly enjoying married life especially with his wife being away. Lynne looks shocked.
It is a lovely day so George and Lynne have gone for a drink in the garden of a pub. This could be the Ferryboat Inn but it is unlikely that Tim would be cheating on his wife in a place where so many people would know him. Wherever they are, Lynne is enjoying a brandy whilst George has opted for a jar of mustard as his aperitif.
George timed his little speech to perfection, revealing the twist at the very end to maximum effect. This means he must know that Tim is having an affair. If it was a shock to him then he may have whispered to Lynne that Tim is kissing someone who isn't his wife, and on his wedding anniversary of all times.
George also knows that this is Tim's wedding anniversary. Either Tim has told him that it is his wedding anniversary soon but his wife's away on business so he's going to meet up with his mistress or George went to Tim's wedding. You would assume that if he went to Tim's wedding then Lynne would have gone too, and therefore know that that is not Tim's wife. The conclusion of all this is that either Tim is flaunting his affair all over the pub or Lynne is so self involved that she can't remember the bride at a wedding.