OFT rules out pub sector super-complaint
OFT rules out pub sector super complaint finding 'no evidence' of competition concerns
Thursday, 22, Oct 2009 10:55
By Sarah Garrod
A super-complaint by the Campaign for Real Ale (Camra) has been dismissed by the Office of Fair Trading (OFT).
The OFT found no evidence that ties between pub companies and landlords were harming competition in the pub sector, after a Camra super-complaint argued there were 'beer ties'.
Beer ties are where landlords have to buy beer from the pub owners. But the OFT said in response to the complaint that they had "not found evidence that supply ties are resulting in competition problems that are having an adverse impact on consumers".
Camra has since hit back, saying the OFT are failing to protect consumers be taking no action at a time when prices are rising and seven pubs a day are closing.
Simon Williams, senior director of the OFT's goods group, said: "Any strategy by a pub-owning company which compromises the competitive position of its tied pubs would not be sustainable, as this would result in a loss of sales.
"Pub-owning companies are not therefore protected from competition by virtue of the supply ties agreed with their lessees.
"We understand that our response to Camra comes at a difficult time for the industry, but the evidence indicates that consumers benefit from a good deal of competition and choice within this sector."
Camra's super-complaint came after the parliamentary business and enterprise select committee called for urgent action to re-balance the relationship between pub-owning companies and their lessees in the interest of consumers.
Today Mike Benner, Camra 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."
Camra is now urging business secretary Lord Mandelson to overrule the OFT by referring "anti-competitive and unfair tie arrangements" of the large pub operating companies to the Competition Commission for an urgent investigation.
They say in taking the decision Lord Mandelson will help secure a sustainable future for Britain's pubs and a fair deal for Britain's 14 million pub-goers.
Dr. Rick Muir, author of 'Pubs and Places', added: "Pubs play a key role in community life by providing a friendly and safe environment for people to socialise with friends, family and their wider community."