UK: Office of Fair Trading launches pub tie probe

By | 27 July 2009

The UK's Office of Fair Trading is to investigate the legal tie between pub companies and their tenants, following a complaint from the Campaign for Real Ale (CAMRA).

The 90-day probe will examine whether the so-called 'beer tie' between pubs and tenants is "significantly harming the interests of consumers", said the Office of Fair Trading late on Friday (24 July).

CAMRA used its legal status as a registered consumer body to lodge a "super complaint" with the OFT, forcing the competition watchdog to open an inquiry.

In May, the UK House of Commons Business & Enterprise Committee said that the beer tie was "exacerbating" the financial difficulties pubs face. The tie forces tenants to buy beer supplies from the pub company that they are tied to.

Up to 52 pubs are closing down every week in the UK, according to British Beer and Pub Association figures released last week.

Pub companies, such as Punch Taverns and Enterprise Inns, deny that the beer tie is a factor in the decline of the UK on-trade.

Punch said, following the Business & Enterprise Committee report: "We strongly believe that the tied pub model provides a fair and equitable approach to sharing risk between ourselves and our licensees, represents a low cost opportunity for entrepreneurs, and has a rightful place in the market." 

Sectors: Beer & cider

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