OFT to take no action over beer tie

22 October 2009 by
OFT to take no action over beer tie

The Office of Fair Trading (OFT) has rejected the Campaign for Real Ale's (Camra) "super-complaint" over the business model of the large pub companies and ruled that the beer tie does not have an adverse impact on consumers.

Camra also raised other issues including the methods used by pub-owning companies for calculating rents.

But the OFT today announced that it has not found evidence that supply ties are resulting in competition problems that are having an adverse impact on consumers.

It found that there is "generally effective competition between pubs" and does not consider that supply ties contribute to higher prices or prevent pubs offering a wide choice to consumers.

The OFT acknowledged the concerns of pub lessees, but stressed that the objective of its work is to ensure that effective competition delivers value and choice to consumers.

Simon Williams, senior director of the OFT's goods group, said: "Any strategy by a pub-owning company which compromises the competitive position of its tied pubs would not be sustainable, as this would result in a loss of sales. Pub-owning companies are not therefore protected from competition by virtue of the supply ties agreed with their lessees."

"We understand that our response to Camra comes at a difficult time for the industry, but the evidence indicates that consumers benefit from a good deal of competition and choice within this sector."

OFT verdict on beer tie referral to Competition Commission expected >>

Mixed response to Camra's beer-tie super-complaint >>

Camra lodges 'super-complaint' over beer tie and high rents >>

The beer tie: close to breaking point? >>

By Daniel Thomas

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