Pub tie dispute goes on as OFT reopens investigation

Pub landlords are likely to welcome news that the Office of Fair Trading (OFT) will reopen an investigation into unfair ties between pub companies (Pubcos) and their pub tenant landlords.

The OFT’s decision follows increased legal pressure from established pub group CAMRA (the Campaign for Real Ale) to reinstate the investigation after the original OFT enquiry – which ruled that there was no evidence to suggest unfair practice in the sector – appeared to settle the matter in October 2009.

CAMRA has argued that anti-competitive practices are inflating pub beer prices by roughly 50p a pint. It said that this restricts consumer choice and ultimately leads to "chronic underinvestment" in UK pubs.

A beer-tie forms part of the lease between the Pubco and the pub landlord, and often states that beer must be purchased directly from the Pubco. Under the agreement, the pub landlord may be prohibited from purchasing beer or other goods from different suppliers.

CAMRA has stated that it is delighted that the OFT has responded to its appeal by agreeing to reopen the pub tie investigation.

Mike Benner, Chief Executive of CAMRA, commented: 

“We are hopeful that on re-examination of the pubs market the OFT will decide to act against anti-competitive behaviour in order to deliver a fair deal for consumers. CAMRA looks forward to working with the OFT to deliver reform of the beer tie so that the pub market works in the interests of consumers.”

The OFT has welcomed comments from members of the industry in order to further aid its review.

Written views on the previous findings and response to CAMRA’s complaint should be submitted by 24th March 2010, the OFT has said.