The Campaign for Real Ale (Camra) has called on the government to overrule the Office of Fair Trading’s decision to not investigate pub company ties any further.
Camra criticised the OFT’s response to its super-complaint published this morning and said that the government should refer unfair tie arrangements in the pub sector to the Competition Commission.
Mike Benner, Camra’s chief executive said: “We do not accept that there is sufficient competition between pubs or adequate consumer benefit from competition and choice within this sector.
“The OFT decision fails to address the legitimate concerns raised both in our super-complaint and the BEC report and does nothing to address the imbalance in the landlord/ lessee partnership which is leading to higher prices, less choice and weak investment in pubs.
“It is difficult to see how the OFT can argue that competition is working well in the pubs sector when demand is falling, yet prices are rising. Urgent action is now required by government to stem the flow of pub closures, build a sustainable future and ensure that consumers get a fair share of the benefit from tied agreements as demanded by competition law.
“There simply cannot be effective competition between all pubs when many pub landlords are placed at a huge disadvantage, by paying wholesale beer prices that can be around 50p a pint greater than their free of tie competitors.”
The British Beer & Pub Association (BBPA) has said that it was happy with the OFT outcome, but that it would press ahead with implementing its reform package to improve transparency between licensees and pub companies.
Brigid Simmonds, chief executive, said: “The BBPA is very pleased that the OFT has announced a clean bill of health for the pub sector. We have always thought that a thorough and dispassionate study of the evidence would deliver this conclusion.
“We will now continue to press ahead with implementing our agreed reform package to improve transparency and openness between licensees and pub owning companies.
“We will also renew our focus on working constructively with government, MPs and other stakeholders - particularly on the critical areas of tax and regulation, which are the true cause of the current pressures on pubs. Our objective is to build a policy environment that recognises and supports the considerable contribution of the great British beer and pub sector to the nation’s economic and social life. It is time for all of us focus on that task and work together in achieving that.”
The Association of Licensed Multiple Retailers (ALMR), however, expressed disappointment that the OFT would not investigate the beer tie any further.
Nick Bish, chief executive of ALMR, said: “We believe that Camra made a good case for OFT to conduct its own thorough study into the impact on consumers of supply deals in the pub sector and regret very much that it has decided not to do so.
“While we remain concerned about the delay and uncertainty of a full Competition Commission Inquiry we know that there is much to be done to clarify the issues surrounding leases and supply agreements and we will be working with RICS and our colleagues in the Independent Pub Confederation to achieve a better, fairer tied lease model in our industry.”
The comments follow the OFT’s response to Camra’s super-complaint this morning, saying that it had “not found evidence that supply ties are resulting in competition problems that are having an adverse impact on consumers”.
