The Campaign for Real Ale is to launch a legal challenge to the UK competition watchdog's refusal to fully investigate the tie between pub companies and their tenants.

Members of the Campaign for Real Ale (Camra) criticised the Office of Fair Trading (OFT) in October, after the regulator refused to launch a full investigation into the so-called pub tie arrangement.

Camra said yesterday (22 December) that is seeking extra funding to launch a legal challenge to the OFT's decision.

The OFT conducted a 90-day probe of the tie over the summer, at the request of Camra. However, the watchdog said it found no evidence that the pub tie was anti-competitive or harmful to consumers.

Around 24,000 pubs operate under the "tie" contracts also known as "wet rent", whereby pub tenants are obliged to buy their beer supplies from their landlords. Critics blame the tie for exacerbating financial pressure on pubs.

The OFT ruling was welcomed by the British Beer and Pub Association, which has been working with other industry trade bodies to devise and implement a new code of practice to govern the relationship between pub companies and their tenants.