Pub companies given ‘last chance’ to reform

A legal framework could be introduced to regulate pub companies if they do not react to criticism that they are restricting competition in the sector, MPs have warned.

The statement, issued by the Business, Innovation and Skills Committee, follows an ongoing dispute over whether the relationships between pub companies and their tenants are unfair.

It is claimed that the so-called ‘beer ties’ often mean tenants have to purchase stock solely from their owner company at higher prices.

The Committee stated:

“The industry must be aware that this is its last opportunity for self-regulated reform. Should those problems persist beyond June 2011, we will not hesitate to recommend that legislation to provide statutory regulation be introduced.”

In October 2009, the OFT ruled that there was no evidence to suggest unfair practice in the sector. However, it appears to have re-opened its investigation following increased pressure from pub group CAMRA, and has recently welcomed comments from businesses on the matter.