The lobby group Fair Pint has told the Office of Fair Trading (OFT) that the beer tie has led to higher prices for consumers and a lack of investment in the sector.
In a submission to the OFT as part of the Campaign for Real Ale's super complaint, the organisation said that the lack of transparency in the rent setting process had led to an "exploitative" relationship between pub companies and tenants.
In a 21-page response, Steve Corbett, founding member of Fair Pint, said: "The pubco model which has also being adopted by most of the brewers with tied estates is an exploitative relationship between and as well as making it difficult for tied tenants to make a living from their pubs, has led to rising prices, less choice and worsening service for consumers.
"It is clear the pub market is not functioning in an efficient and competitive way and that this lack of competition and innovation is putting the future of the whole sector at risk."
