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Industry rejects MPs' call for beer-tie investigation

21 May 2009 by
Industry rejects MPs' call for beer-tie investigation

Both sides in the debate over the controversial beer tie have warned against referring the issue to the Competition Commission, after the move was recommended by a panel of MPs last week.

In its long-awaited report, the Business and Enterprise Committee (BEC) accused the major pub companies of "downright bullying" of tenants. The BEC added that, while not all the difficulties faced by the industry had been caused by the beer tie, there remained evidence of "serious problems caused by the dominance of the large pub companies".

The committee, which was highly critical of the UK's two largest pub companies, Enterprise Inns and Punch Taverns, called for the beer-tie to be severely limited and for a Competition Commission investigation.

But while industry bodies such as the Association of Licensed Multiple Retailers, the Campaign for Real Ale (Camra) and the Federation of Small Businesses (FSB) welcomed many of the report's findings, they all warned against a full-blown competition inquiry.

"A two- to three-year investigation would create huge disruption and uncertainty for the UK's pub owners, licensees and consumers," said Camra chief executive Mike Benner.

The FSB called instead for the immediate inclusion of an opt-out to the beer tie to be written into lessees' contracts.

Enterprise Inns and Punch Taverns both dismissed the report's findings and said there were no grounds for an inquiry, although the British Beer & Pub Association stressed that it would "welcome the opportunity to engage fully in such a process" as the beer tie is a "robust and sustainable business model".

The Office of Fair Trading said it would consider any new evidence it was presented with, while Consumer Affairs Minister Gareth Thomas hinted an enquiry could be forthcoming, stating the Government was "aware of concerns about the relationship between pub companies and their lessees".

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Enterprise Inns and Punch Taverns hit back at damning beer-tie report >>

MPs accuse pubcos of ‘downright bullying' of tenants >>

By Chris Druce

E-mail your comments to Chris Druce here.

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